2026-01-02 13:26:23

At the beginning of 2026, the Federal Reserve's interest rate policy became the biggest cold shower for the market. The federal funds rate remains stuck in the 3.50%-3.75% range, with no movement at all. Since the symbolic 25 basis point rate cut at the end of last year, the decision-makers seem to have hit the brakes, with no follow-up actions.

The market was expecting a "big liquidity injection" at the start of the year, but instead received a cold splash of water. From the latest published dot plot, the situation is even clearer: in 2026, there may only be a 25 basis point rate cut for the whole year, with the final mid-point rate locked around 3.4%. This isn't a shift in policy, at best it's a slight "touch-up" on the high interest rate.

More telling is that the official inflation outlook remains at 2.4%, while GDP growth forecasts have been revised upward to 2.3%. The logic behind these figures is straightforward: the economy is more resilient than expected, inflation has eased but hasn't been fully subdued, so the central bank isn't in a rush to loosen policy.

From another perspective, the Fed's attitude is to prioritize keeping inflation under control, even if that means maintaining high rates for longer. For the market, "long-term high interest rates" has become the new baseline expectation. Investment strategies relying on cheap liquidity need to be re-evaluated. True easing policy may only be launched when clear recession signals appear.

In the face of this "patience in manicure" approach by the central bank, the market's patience is becoming the most expensive capital.

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MemeEchoer

· 7h ago

Powell really thinks we can't rush, just sitting there dawdling The metaphor of slamming on the brakes is perfect, it feels like being tortured by high interest rates until the end of time Waiting for a recession? Probably waiting until the yellow flowers wither, still have to endure the pain Cheap liquidity is gone, this year has been a bit tough, brother Manicuring nails? I think he's building a wall, the interest rate wall is getting thicker and thicker Inflation hasn't been contained and remains stuck, logically it makes sense but it’s really uncomfortable This wave of prolonged high interest rates, it feels like retail investors are about to lose more skin

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GasFeeBeggar

· 7h ago

The Federal Reserve is just playing "patching things up," not genuinely planning to loosen monetary policy. The dovish folks will have to wait a bit longer; it seems this high-interest-rate environment will last for a long time. Wait, a 2.3% GDP growth rate still needs to prevent inflation? That logic is a bit hard to hold up. It's all about "patience," in other words, doing nothing. How are crypto enthusiasts supposed to endure this life? The long-term high interest rates... those good days for DeFi protocols might really need to be reconsidered. The market has already gotten used to being manipulated, saying "the last time" for a hard landing, but they are just taking their time. Is 2.4% inflation still considered "relieved"? I feel like it's still a bit uncertain. So, don't expect any big market moves this year; we have to wait for recession signals. The central bank is really treating our patience as the most valuable commodity.

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SandwichTrader

· 7h ago

Powell is really holding back; this pace is much tougher than I expected. The crypto hodlers will have to wait a bit longer; the high interest rate story isn't over yet. Strong economic resilience might actually be bad news; high rates still need to be kept in check. Isn't this just telling us that the spring of the crypto market hasn't arrived yet? Manicuring nails? Bro, he's sharpening his sword, waiting for the recession signal to appear. With cheap liquidity gone, those leveraged positions need to be cautious. GDP has been revised upward, but inflation hasn't been contained yet; the Fed's logic is actually quite tight. The real show is in the second half of the year; those entering now are all gamblers. Maintaining high levels for so long makes stablecoin yields even more attractive? That's why whales have been hoarding cash; smart money has already sniffed it out.

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ChainWatcher

· 8h ago

Powell, are you trying to starve us to death? Still fixing nails... Another year of the leek harvest, high interest rates becoming long-term? Just say that it's bearish for crypto. Waiting for recession signals? By the time that happens, even the yellow flowers will have withered, and my positions are long gone. These data points seem quite contradictory. GDP is revised upward, but inflation isn't coming down. I really don't know what the Federal Reserve is thinking. So, it's still about cutting leeks on the chain; traditional finance is already no zuo no die. 25 basis points? That's the legendary "surprise," hilarious. How long will high interest rates last? Does everyone have expectations? Feels like it's going to cool off for a while.

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LowCapGemHunter

· 8h ago

The Federal Reserve is really testing our patience this time; high interest rates have locked everything down. What's going on? Do we have to rely on a recession to rescue liquidity? That logic is a bit extreme. Getting off-topic, but the truth is: those who went all-in are now going to have a tough time. Fixing the edges? Clearly, it's just holding steady without moving. Before inflation is fully under control, let's just wait patiently. What do you call this new benchmark expectation? I think it's just the new "harvester" starting. Maintaining high levels for longer... wallets are getting emptier again.

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OldLeekNewSickle

· 8h ago

Seeing through but not exposing, high interest rates have long been something to accept. The market is still fantasizing about easing liquidity, but now reality is hitting hard. Wait, everyone. The real opportunity will only come after the economy crashes once. Talking about risk warnings is less useful than checking if your positions can still hold up. Manicure? The central bank is sharpening its knife, waiting to cut. Long-term liquidity tightening means projects relying on this strategy should change their script. Instead of guessing the Federal Reserve's intentions, ask yourself how much ammunition you still have. What does it mean to sustain at high levels for longer? It means those who can't hold on will be the first to exit. In fact, we should have accepted that "waiting" is the most expensive cost long ago. There's no way around it. The harvesting mechanism meets high interest rates—what tricks can this combo play? Just for your reference, everyone. Don't say I didn't warn you.

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