BlackRock's Major Prediction: Limited Room for Federal Reserve Rate Cuts by 2026, How Should the Crypto Market Strategize?

Global largest asset management company BlackRock’s strategists Amanda Lynam and Dominique Bly recently pointed out that the Federal Reserve may only implement limited rate cuts in 2026.

This financial giant, managing up to $14 trillion in assets, believes that unless there is a significant deterioration in the US labor market, the Fed’s room for rate cuts will be very limited.

This means that from the end of 2025, the monetary policies of major developed economies worldwide have shifted from a “synchronized easing” path to a new stage of “multi-speed parallel” adjustments with varying pace and direction. For the crypto markets that are highly sensitive to macro liquidity, this is a signal worth serious attention.

01 Big Picture: Why Is Rate Cut Space Limited?

BlackRock, the global asset management giant, issued its outlook on December 24, 2025, setting a cautious tone for the future interest rate environment. Its core judgment is that after a cumulative 175 basis points of rate cuts in this cycle, the Fed may be approaching a neutral interest rate level.

The logic behind this judgment stems from persistently strong labor market data, which could limit the need for the Fed to adopt more aggressive easing policies.

In 2025, the Fed has already conducted three consecutive rate cuts, lowering the federal funds rate target range to 3.50%–3.75%. BlackRock’s analysts believe that unless the employment market suddenly deteriorates sharply, this interest rate level is already sufficiently “neutral,” leaving little room for further rate cuts.

02 Divergence Pattern: Market vs. Institutional Expectations

BlackRock’s cautious forecast is not an isolated case but reflects a widely held view. In fact, there are significant differences between market expectations and policymakers regarding the rate cut path in 2026.

Currently, most investment banks, including Goldman Sachs, Morgan Stanley, and Bank of America, predict that the Fed will cut rates twice in 2026, totaling 50 basis points. However, some institutions hold more extreme views: JPMorgan Chase and Deutsche Bank forecast only a 25 basis point cut; HSBC and Standard Chartered expect no rate cuts throughout the year.

This divergence is also evident within the Federal Reserve. In the December 2025 rate decision, three dissenting votes were cast, reaching a high since 2019, highlighting the difficulty policymakers face in balancing economic slowdown risks with inflationary pressures.

03 Market Status: Crypto Asset Prices Under Liquidity Tightening Expectations

When macro expectations turn cautious, the crypto market also exhibits corresponding volatility. According to Gate data, as of December 25, 2025, the market is experiencing a broad adjustment.

As a market indicator, Bitcoin (BTC) price fell below the $88,000 mark, reporting $87,698.4. Ethereum (ETH) also was not spared, briefly dropping below $2,900, and currently rebounding slightly to $2,934.59.

Not only mainstream coins, but multiple sectors of the entire crypto market have declined in the past 24 hours. Among them, the NFT sector led the decline, falling over 9%; DeFi sector down 2.22%; Layer2 sector down 2.30%.

04 Deep Logic: The Dilemma of the Economy

Why is it difficult for the Fed to implement large rate cuts? The fundamental reason lies in the US economy facing a dilemma: needing to monitor downside risks to employment while inflationary risks remain prominent.

The Fed’s latest economic forecast shows that US economic growth is expected to rise from 1.7% this year to 2.3% in 2026, with core PCE inflation projected at 2.5%, still above the 2% policy target.

Atlanta Fed President Bostic warned that multiple “tailwinds” in the current economy could continue to exert upward pressure on inflation, and it is expected that by the end of 2026, inflation will still be above 2.5%.

05 Crypto Strategies Under Limited Easing

Faced with potentially limited room for rate cuts, the driving logic of the crypto market is changing. Investors can no longer rely solely on aggressive monetary easing to push asset prices higher. This marks a shift from liquidity-driven growth to a new phase dominated by fundamentals such as technological innovation and application deployment.

In such an environment, even moderate monetary easing can support crypto valuations by reducing the opportunity cost of holding non-yielding assets like Bitcoin. Institutional funds may seek higher-yield alternative assets amid declining yields in traditional fixed income products, which is favorable for the crypto market.

For investors, the following strategies can be considered:

• Focus on fundamentals: prioritize blockchain projects with real application value and active developers.
• Diversify allocations: avoid overexposure to a single mainstream cryptocurrency, and consider spreading across different categories of digital assets.
• Pay attention to independent narratives: seek projects that benefit from technological development or ecosystem expansion, rather than relying solely on macro liquidity.

A new round of global monetary policy divergence has already formed. The Fed has become more cautious after consecutive rate cuts, the European Central Bank maintains a neutral stance, and the Bank of Japan is cautiously raising interest rates.

For crypto market participants, understanding the macro policy outlooks of giants like BlackRock is not about precisely predicting each rate move but about grasping the overall trend of the capital environment.

As the most accommodative liquidity phase may be passing, the market will increasingly reward innovations based on solid technology and real demand rather than mere liquidity arbitrage.