Low Liquidity Week: Fed minutes to dominate markets ahead of New Year
Next week’s markets will be thinly traded due to the holiday season and New Year, leaving global liquidity very low. Major macro releases are limited: the Fed will publish its December meeting minutes (Tue 03:00), U.S. initial jobless claims for the week to Dec. 27 (Wed 21:30), and the December S&P Global manufacturing PMI final print (Fri 22:45). No central bank officials are scheduled to speak. The Fed minutes are the focal point as traders hunt for clues on the timing of the next rate cut and the degree of policymakers’ inflation concerns. Market participants will scrutinize dissent within the FOMC and any signals about the incoming Fed chair under the new administration; however, the article notes a new chair is likely to be more dovish than Powell, which may limit reaction risk. Given the holiday-induced low volumes, notable market moves are more likely to occur once liquidity returns in early January, with a true 2026 market start expected in the second week of January. (Main keywords: Fed minutes, low liquidity, rate cut, FOMC, holiday trading)
Neutral
The news is primarily about calendar and liquidity conditions rather than new policy actions or surprise data, so its direct impact on crypto markets is likely neutral. Key reasons: 1) Low liquidity during holidays typically increases volatility risk but does not by itself change fundamentals; traders may see larger intraday moves in BTC, ETH and altcoins, especially around the Fed minutes release, but such moves are often short-lived. 2) The Fed minutes could provide hints on the timing of rate cuts; dovish signals historically support risk assets including crypto (bullish), while hawkish tones would be negative. However, the article suggests a likely dovish incoming Fed chair, which would temper downside risk. 3) With few other data points and no central-bank speeches, market drivers are concentrated on the minutes — that concentrates event risk but does not mandate a directional bias. Short-term: elevated volatility and event-driven trades around the minutes and PMI release, with stop-run and liquidity-driven exaggerations. Long-term: little immediate structural change; genuine trend shifts would wait for clearer policy moves (actual rate cut timing and chair appointment), expected to become clearer after markets reopen in earnest in January. Traders should reduce position size or widen stops during the holiday thin market and prepare for potential spikes during the minutes release.