Fed official signals multiple 2026 rate cuts; crypto market wavers
The crypto market weakened on Feb. 17 as traders digested dovish comments from Austan Goolsbee, president of the Federal Reserve Bank of Chicago, who said several interest-rate cuts could be appropriate in 2026 if inflation continues to fall toward the 2% target. Bitcoin traded near $67k and Ethereum near $1,980 while total crypto market cap slipped 0.15% to about $2.34 trillion. The Crypto Fear & Greed Index remained in “extreme fear” (13) and the Altcoin Season Index was 31. Recent US CPI data showed headline inflation eased to 2.4% in January (from 2.7%), with core CPI steady at 2.5%, supporting the view of lower rates ahead. Market expectations differ: the Fed’s dot plot implies one cut this year, while some traders (Polymarket) price in three cuts. Hedge funds are reducing US dollar exposure per a Bank of America survey, which can be supportive for dollar-denominated crypto prices. Traders now await the Fed’s minutes due Wednesday for clearer guidance. Primary takeaways for traders: potential easing is a bullish macro input for crypto prices, but immediate market sentiment remains fragile (extreme fear), so volatility around Fed minutes and economic data is likely. Key keywords: Fed rate cuts, inflation, Bitcoin, Ethereum, crypto market, dollar weakness.
Bullish
Austan Goolsbee’s comments signaling the possibility of multiple rate cuts in 2026 and falling US inflation materially increase the probability of monetary easing. Historically, easier monetary policy and a weaker dollar have been net positives for crypto prices — for example, sharp rate cuts and liquidity measures during the COVID-era correlated with major Bitcoin and altcoin rallies. Current indicators show pockets of worry (extreme Fear & Greed Index) and modest near-term price weakness, but the macro direction implied by lower rates is supportive. Immediate market reaction is likely to be volatile: traders will react to the Fed minutes, CPI and jobs data for confirmation. Short-term: elevated volatility and risk-on/bid dynamics around macro prints. Medium-to-long-term: multiple rate cuts would tend to be bullish for crypto valuations, increasing risk appetite and capital flows into dollar-denominated crypto assets. Caveats: divergence between official Fed guidance (dot plot: one cut) and market bets (Polymarket: three cuts) could lead to reversals if the Fed signals restraint; geopolitical developments and liquidity shifts could also override the rate narrative.