US Federal Reserve Less Likely to Cut Rates, Will Crypto Market Sustain?

TheNewsCryptoPublished on 2026-01-10Last updated on 2026-01-10

Abstract

The US Federal Reserve is highly unlikely to cut interest rates in its upcoming January 27-28 meeting, with market data indicating a 97.2% probability of no change. This decision is influenced by recent economic data, including a slight drop in the unemployment rate to 4.4% in December 2025, coupled with weak annual job growth—the lowest since 2023. While rate cuts typically boost investor liquidity and confidence, the crypto market has shown resilience, with a global cap nearing $3 trillion. Despite current declines, major cryptocurrencies like BTC and ETH are projected to see significant gains in the next three months.

The US Federal Reserve is less likely to cut rates in its Jan 27-28 meeting. This has triggered anticipation around the possibility for the crypto market to sustain decent gains. Coming as an additional factor is the recently announced unemployment data, wherein a slight drop balanced against job growth has fueled larger skepticism.

Chances for US Federal Reserve to Cut Rates

The US Federal Reserve last cut the interest rate by 0.25% in December 2025. That brought down rates between the target of 3.50% and 3.75%. Now, a poll by Polymarket has underlined that there is a 97.2% chance for the Fed to not cut lending rates in its Jan 27-28 meeting. Notably, the chances for no change to the rate were 81% a month ago.

There are slim chances for rate cuts, per Polymarket. Around 2.5% chances are that the rate will be slashed by 25 bps. The remaining 0.4% chances are in favor of a 50 bps reduction. Chances for a 50 bps rate cut have largely remained the same throughout the month. The possibility for a 25 bps cut has come down from 22.5%, as applicable on December 11, 2025.

Additional Factor Influencing Rate Cut Decision

Recently announced unemployment data is serving as an additional factor possibly influencing the Fed’s decision to cut rates. The unemployment rate has dipped to 4.4% in December 2025, down from 4.5% in November, according to data by the Bureau of Labor Statistics.

But, it is balanced against job growth, which was reportedly 50,000 in December last year. This brings annual job growth to 584,000, the weakest since 2023. Optimistic numbers by the US economy is believed to have powered better chances for the US Fed to take a decision instead of leaving an uncertain thread hanging down.

Way for Crypto Market

The crypto market ideally thrives on liquidity, which is injected if investors have sufficient capacity to allocate funds. Rate cuts by the US Federal Reserve are often linked to boosting the capacity and confidence of investors. Effects are less visible, considering the global market cap is a lot closer to the $3 trillion mark at the moment.

Nevertheless, top tokens like BTC and ETH are projected to reverse the ongoing decline in the next 3 months. BTC itself could surge by 12.95% to $102,422, and ETH may soar by 81.09% to $5,576.75 during this timeframe.

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