The minutes from the Federal Open Market Committee’s January meeting revealed a more hawkish stance than markets anticipated. According to the document, several policymakers indicated that upward adjustments to the policy rate could be appropriate if inflation remains above target. At its January meeting, the Fed kept the benchmark rate unchanged within the 3.5%–3.75% range.
Although the Fed delivered three rate cuts in the final quarter of 2025, the renewed mention of possible hikes stands out for risk assets. Futures market pricing suggests a high probability that rates will remain unchanged at the March meeting. However, the tone of the minutes signals that the path back to the 2% inflation target may be slower and more uneven than previously expected, weakening expectations of rapid monetary easing.
Higher interest rates are generally viewed as negative for Bitcoin and other crypto assets. In a high-rate environment, investors often rotate toward lower-risk instruments offering stable returns, while rising borrowing costs reduce appetite for leveraged and speculative positions. As long as the Fed maintains a cautious stance, short-term risk appetite in crypto markets may remain under pressure.
