20 hour ago
0 0
Bitcoin’s 2026 Outlook: Fed Shift May Trigger Market Repricing
Macro strategist Alex Krüger links Bitcoin's future to potential changes at the Federal Reserve, highlighting a possible dovish shift under a Trump-aligned central bank.
Key Insights
- Krüger predicts that by 2026, the Federal Reserve will undergo significant changes, with Kevin Hassett potentially leading a more growth-focused and dovish Fed.
- Kevin Hassett is viewed as favoring lower interest rates, seeing high real rates as politically motivated rather than economically sound.
- The potential appointment of Kevin Warsh alongside Hassett could form a dovish core within the Fed, impacting monetary policy towards aggressive rate cuts.
- Krüger warns of institutional risks if current Fed Chair Jerome Powell does not resign his governor seat, which could hinder new appointments and lead to market instability.
- Market projections may underestimate potential rate cuts, with futures indicating rates around 3.02% by December 2026, allowing for further reductions if AI-driven productivity curbs inflation.
Implications for Bitcoin
- A more dovish Fed could lead to a "reflationary steepening," benefiting risk assets like Bitcoin and gold while posing challenges for long-term bond yields.
- Bitcoin currently faces bearish sentiment but could benefit from a macro repricing under a Hassett-led Fed, aligning with Trump's deregulation agenda.
At press time, Bitcoin traded at $92,862.
