"Fed enters phase of gradual easing—not 'massive liquidity'…not as much as markets expect"
Summary
- Lyn Alden said the Fed’s balance sheet is likely to expand to a pace in line with total bank assets and nominal GDP growth.
- She said this would only mildly support asset prices, and that the big print the Bitcoin market expected is unlikely to appear.
- According to CME FedWatch, the implied probability of a March FOMC rate cut fell to 19.9%, and uncertainty tied to the end of Powell’s term and monetary policy is weighing on the 2026 outlook.
The U.S. Federal Reserve (Fed) is likely to enter a phase of gradual liquidity expansion sufficient to support asset prices, but an analysis suggests the so-called “big print” that the Bitcoin (BTC) market has been anticipating will not materialize.
According to Cointelegraph on the 8th (local time), Bitcoin advocate and macro analyst Lyn Alden said, “The Fed’s balance sheet is likely to expand at a pace similar to the growth rate of total bank assets or nominal GDP,” adding that “this is only enough to mildly support asset prices.”
She added that she would “continue a strategy of trimming exposure to overheated assets and holding relatively neglected, scarce, high-quality assets.”
Markets are also increasingly pricing out the possibility of near-term rate cuts. According to CME FedWatch, the probability of a rate cut at the March Federal Open Market Committee (FOMC) meeting fell to 19.9%, down from recent readings. Fed Chair Jerome Powell previously said after the December meeting last year that it was “a difficult phase in which upside risks to inflation and downside risks to employment coexist.”
Meanwhile, Powell’s term expires in May this year, and uncertainty surrounding Wash’s confirmation and the future policy stance is weighing on the 2026 monetary-policy outlook.
Suehyeon Lee
shlee@bloomingbit.ioI'm reporter Suehyeon Lee, your Web3 Moderator.
