Fed officials split on 2026 rate path; market prices 20% January cut odds, 45% in March

Federal Reserve officials are sharply divided on the 2026 rate path, with views nearly evenly split between zero, one or two cuts, the Dec. 31 dot plot showed, after three rate reductions in 2025 brought the target to 3.5%–3.75%, BlockBeats reports. CME data show market-implied probabilities of a January cut at 20% and 45% in March, with most forecasts pointing to only one reduction in 2026. Analysts said that if employment weakens and inflation remains contained, one to two cuts could support risk assets, while a rebound in inflation could pause rate cuts and pressure equities and crypto. Jerome Powell is set to step down in May, and a potentially more dovish successor is viewed as an additional variable for the 2026 crypto market, according to BlockBeats.