The Fed Just Cut Rates Again... and Quietly Set the Stage for 2026

I want to break down what happened at the December FOMC meeting (yesterday) without getting lost in Fed-speak. The Fed cut rates by another 25 basis points (aka 0.25%), bringing us to 3.50 to 3.75 percent. Everyone expected it. The votes on Polymarket predicting this were at around 94%. But the vote wasn’t smooth. One official wanted a deeper cut, two didn’t want to cut at all, and the whole thing had the feeling of a committee that can’t quite agree on what the real state of the economy is.

Powell came out and basically said inflation is cooling (not really), the labor market isn’t as strong as the headline numbers suggest, and 2026 should look better for growth. Ok. But the big signal was this: the Fed thinks it’s almost done cutting. They said they are only looking at one more cut for next year… which on the surface isn’t great news for us in crypto.

But here’s where things actually get interesting. At the same time, they say they’re nearly done cutting, they also ended quantitative tightening on December 1 and will start buying forty billion dollars a month of T-bills to rebuild bank reserves. Powell kept saying that this isn’t QE, but it definitely is. Liquidity coming back into the system is liquidity. Markets don’t really care what label the Fed uses. More money pouring in helps risk assets. And crypto is definitely a risk asset.

The crypto market did the normal dance. Pumped a bit before the meeting. Cooled off right after. Bitcoin spiked to ninety-four thousand, then drifted back to the low nineties. Alts bled more, because of course they did. And honestly, this lines up with every FOMC meeting this year.

But the real story I think you need to know (that barely anyone is talking about) is that Kevin Hassett is very likely to replace Powell as the next Fed Chair under Trump.

And Hassett has been very blunt for someone in that position. He has said, on the record, that he will follow Trump’s instructions. Not suggestions. Instructions. If Trump wants deeper cuts, Hassett isn’t going to push back. He’s already floated the idea of aggressive easing to juice growth, which is what everyone in crypto wants.

So while Powell is still trying to look like an inflation hawk in a suit, the next Fed regime might be gearing up to hit the gas pedal.

What does that mean for crypto? Short term, you’re still dealing with choppy holiday trading, low liquidity, everyone hedging, and BTC will probably keep battling the $80-90k range. But medium term, if you combine the end of QT, the reserve rebuild, expected 2026 growth, and the probability of a more politically obedient Fed Chair… that’s a cocktail that tends to push liquidity into everything, including crypto.

This isn’t a big euphoric setup. It’s more of a reset or a slow turn. But the ingredients are there for Bitcoin to break out in Q1/Q2 and for alts to follow once liquidity really starts moving again.

What am I doing in the meantime? A few things:

1) Looking for brand new, early-stage opportunities that I can stack while I wait for things to start rocketing again next year.

2) Utilizing specialized strategies, like a tax-advantaged account where I can stack gains and stake my cryptos tax-free or tax-deferred.

3) Doubling down on what is already working, like what I cover in my free passive income course that you can find here.

I am still incredibly bullish on crypto, especially going into 2026. I think whatever you do right now, the wrong thing to do is sit on the sidelines or not be engaged. It’s easy to want to give up on crypto or stop paying attention when it gets tough, but these are the times when you can make moves that will have massive impacts later in the cycle. You don’t get rich investing at the top. You get rich by investing when everyone else is too scared to.