The script of the 2026 global financial markets is being rewritten piece by piece by the Federal Reserve's "interest rate cut suspense."

On one side, JPMorgan Chase remains cautious — expecting only one 25 basis point rate cut throughout the year; on the other side, Goldman Sachs has released an aggressive plan — continuous rate cuts starting from March. The divergence on Wall Street has reached its limit. The root of this confrontation is deeply painful: the ongoing rise in unemployment rates versus the stubborn tug-of-war with inflation.

What’s more unsettling is that central banks around the world are actually engaging in "reverse operations." The Bank of Japan has begun an interest rate hike cycle, and the era of rate cuts by the European Central Bank has come to an end, with rate hikes officially on the agenda. If the Federal Reserve counteracts with easing, it could be truly troublesome — a chain reaction of capital outflows and leveraged position liquidations might cause volatile swings in risk assets.

But amid this macro chaos, the crypto market is quietly changing its role, rising from the periphery to become a core player, serving as a reservoir for global liquidity overflow.

**The "Dove-Hawk Battle" Inside the Federal Reserve**

The decision-making process of the Federal Reserve is far more complex than it appears. Once the minutes of the December policy meeting were released, the 9-3 vote tally broke the highest opposition record since 2019. Even officials supporting rate cuts were frank — "This decision is very delicate," some said, and are fully prepared to accept holding rates steady.

Behind this are two forces pulling in opposite directions. On one hand, most officials see the labor market worsening and advocate for continued easing. On the other hand, there are warning voices: core services inflation refuses to cool down, and cutting rates now would be like undermining the 2% inflation target.

There’s also a variable — the voting members of the Federal Reserve FOMC in 2026 are set to change. Four hawkish members are leaving, and four new members with uncertain policy inclinations are joining. Such personnel changes are enough to reshape the entire policy direction.