Key Takeaways
- •Morgan Stanley has revised its timeline for Federal Reserve rate cuts in 2026.
- •The firm does not anticipate a rate cut in December.
- •Crypto markets have not shown an immediate significant reaction to these rate outlook adjustments.
Revised Rate Cut Forecast
Morgan Stanley analyst Michael Gapen stated on November 18, 2025, that a robust employment situation is mitigating unemployment risks, leading to a delay in anticipated Federal Reserve rate cuts. The firm now expects these cuts to commence in 2026.
This revised forecast is significant for market expectations, particularly within the cryptocurrency sector, where interest rate outlooks are a critical factor influencing investment decisions and asset valuations.
Implications and Market Response
As these implications unfold, Morgan Stanley's projections for future interest rate adjustments are being recalibrated. The firm is targeting a terminal rate within the range of 3.0–3.25%. While these adjustments have led to minor market recalibrations, the broader economic landscape has not experienced immediate shifts.
Prominent figures in the cryptocurrency space have offered their perspectives. Arthur Hayes, CEO of BitMEX, commented on Twitter, noting that "Higher for longer rates are a headwind for risk assets, including crypto." Similarly, Binance CEO CZ tweeted that a postponement of rate cuts could potentially result in further market consolidation.
The labor market remains resilient, and the risk of a sharp rise in unemployment has diminished. As a result, we no longer expect a December rate cut. Our base case is now for three cuts in 2026: January, April, and June, with the terminal rate settling at 3.0–3.25%. — Michael Gapen, Thoughts on the Market Podcast
Historical Context and Current Crypto Trends
In 2023, a comparable shift in expectations regarding Federal Reserve rate cuts led to a temporary increase in risk asset valuations as markets adapted to a more supportive monetary policy environment.
Bitcoin (BTC) is currently priced at $90,314.22, exhibiting minimal volatility with a 0.03% decrease over the past 24 hours, according to CoinMarketCap data. Its market capitalization stands at $1.80 trillion, with recent trading volumes reaching $86.77 billion, marking a 26.38% increase. With a circulating supply of 19.95 million BTC, Bitcoin continues to hold strong market dominance at 58.32%.
Coincu research analysts foresee potential regulatory discussions concerning the interplay between interest rate policies and cryptocurrency dynamics. Historical trends indicate that shifts in economic policy can precipitate volatility; however, Bitcoin's robust fundamentals are expected to provide market stabilization.