Author: seed.eth, Bitpush

After three consecutive rate cuts, the Federal Reserve finally pressed the "pause button" at its first policy meeting in 2026.

Early Thursday morning Beijing time, the Federal Reserve announced that it would maintain the benchmark interest rate at 3.5% to 3.75%. This somewhat "unremarkable" decision met the market's expectations of over 97%, but it also revealed subtle cracks within the policy: two Fed governors voted against a further 25 basis point rate cut.

The boots landed, but the direction was unclear.

In its policy statement, the Federal Reserve maintained a relatively cautious tone: the economy is still "expanding solidly," inflation has "fallen somewhat but remains above target," and the labor market is showing signs of cooling but does not yet pose a systemic risk. The core message is very clear—monetary policy has transitioned from a phase of "active adjustment" to a phase of "observation and verification."

It's worth noting that the Federal Open Market Committee (FOMC) is not a monolithic entity. Two members voted to continue cutting interest rates, indicating a continued divergence in policy stance between declining inflation and economic slowdown. Overall, however, the Fed is clearly unwilling to make new policy commitments in the current environment, choosing instead to leave the decision to subsequent data.

This stance sets the tone for the market: there is little clear directional guidance in the short term, and asset pricing will revolve more around "changes in expectations" rather than "changes in policy."

Current market pricing of the federal funds rate indicates that investors generally expect rates to remain unchanged this quarter, with the first rate cut now pointing back to June of this year, and the market further anticipating a possible pause in the rate-cutting cycle until 2027.

However, there are still significant differences among institutions regarding the interest rate path after this quarter: Morgan Stanley, Citigroup, and Goldman Sachs predict interest rate cuts in June and September respectively, while Barclays believes that cuts may occur in June and December, and JPMorgan Chase maintains its expectation that interest rates will remain unchanged throughout the year.

Macro Market: Gold Leads the Way, Other Assets Remain Unaffected

If the Fed's decision itself didn't cause much of a stir, then the divergence in asset performance is the real signal worth paying attention to.

Following the interest rate decision , spot gold prices surged, breaking through the $5,500/ounce mark for the first time . In just four trading days, gold prices climbed from slightly below $5,000, breaking through multiple round numbers of $100, accumulating a gain of over $500, a weekly increase of 10%. This speed and magnitude make gold the undisputed protagonist in the global market.

The strength of gold is not simply driven by interest rate trading logic. Although the Federal Reserve has paused rate cuts, after continuous easing, its policy is nearing a neutral range, easing the marginal constraints on real interest rates. Meanwhile, persistent inflation, trade frictions, political uncertainty, and global policy maneuvering are intertwined, continuously amplifying demand for safe-haven assets. Amidst these multiple uncertainties, funds have opted for the most traditional and widely accepted safe-haven assets.

In stark contrast to gold, other assets performed modestly . US stocks remained range-bound after the decision, failing to break out of any trend; the US dollar index saw limited volatility; and US Treasury yields adjusted slightly, but this did not evolve into a systemic safe-haven buying frenzy.

The same applies to crypto assets. After the news was released, Bitcoin's price briefly dipped from $89,600 to the $89,000 mark before quickly rebounding to around $89,300. The fluctuation was less than 1%, Ethereum (ETH) hovered around the $3,000 mark, and major altcoins such as Solana and XRP also remained within their previous trading ranges.

The market has provided the answer in the most intuitive way: when the direction is unclear, gold has been pushed back to center stage, while other assets have entered a waiting state.

More important than interest rate cuts: Who will shape the next phase of the Federal Reserve?

Following the interest rate decision, market focus quickly shifted. Rather than "when will rates be cut," investors began to focus on another question: who will lead the Federal Reserve in the next phase?

According to the latest data from Polymarket, in betting on "who Trump will nominate as Federal Reserve Chair," the odds of winning among the candidates have widened:

Rick Rieder: The market's most favored "pragmatist" (approximately 34%)

Rick Rieder currently has the highest probability of being bet on, with a support rate of approximately 34%, and this has been rising significantly recently.

Rieder is currently BlackRock's Global Chief Investment Officer for Fixed Income. He has long been deeply involved in bond market and macro asset allocation decisions and is considered one of the very few individuals who truly spans the "policy-market-capital structure." His public views often emphasize financial market stability, policy transmission efficiency, and avoiding unnecessary systemic shocks.

The market perceives Rieder's potential appointment as Federal Reserve Chairman as a move that would mean the central bank would place greater emphasis on financial conditions and asset price signals, maintaining policy flexibility within permissible inflation limits. This expectation explains his increasing financial support in prediction markets—a bet on "predictability" and "market friendliness."

Kevin Warsh: A representative of discipline and integrity (approximately 28%)

The second-ranked candidate is former Federal Reserve Governor Kevin Warsh, whose current odds of winning are approximately 28%.

Warsh is known for his clear stance and tough approach, emphasizing central bank credibility and long-term discipline on inflation issues. He has repeatedly expressed his concerns about excessively loose monetary policy and is considered a key representative of the traditional hawks.

If Warsh wins, the market generally expects the Federal Reserve to be more cautious in its pace of interest rate cuts, tolerance for asset prices, and policy communication. This style typically helps to curb inflation expectations, but it also means that risk assets will need to adapt to a more stringent financial environment.

Christopher Waller: Academic Federal Reserve Governors (approximately 20%)

Current Federal Reserve Governor Christopher Waller has a betting probability of about 20%, ranking third.

Waller, with his strong academic background and clear policy logic, has long been considered one of the most influential "hawks" within the Federal Reserve (advocating for high interest rates to suppress inflation). However, at this FOMC meeting, he voted against further rate cuts, suggesting that he believes inflation is no longer a major threat or that he is feeling significant political/economic pressure.

If Waller takes over, the Federal Reserve may place more weight on employment and growth targets, and its policy pace may be relatively flexible. However, whether it can maintain the central bank's independence in a highly politicized environment remains a focus of market attention.

Will Bitcoin continue its bear market?

As macroeconomic uncertainties intensify, on-chain data is beginning to send alarming signals.

CryptoQuant's latest analysis shows that the 365-day moving average of Bitcoin's "Supply in Loss" is rising again. This metric measures the percentage of Bitcoin whose current price is below its most recent on-chain transfer price and is an important tool for observing changes in market structure.

When Bitcoin hit an all-time high of $126,000 last October, this indicator briefly fell to its lowest point in the current cycle, reflecting a highly profitable market. However, as prices retreated, Supply in Loss began to rise steadily, indicating that losses were gradually spreading from short-term traders to longer-term holders.

Historically, such directional changes often occur in the early stages of a bull-bear market transition. However, it's important to emphasize that this indicator has not yet reached the typical "capitulation zone" and is more of a risk signal than a trend confirmation.

This means that Bitcoin's current state is closer to a period of consolidation and structural reorganization at high levels , rather than having entered a clear bear market's main downward phase. Whether it will evolve into a deeper correction remains highly dependent on macro liquidity and subsequent capital flows. Gabe Selby, research director at CF Benchmarks, stated, "Short-term bullish catalysts for Bitcoin still exist, but they are increasingly leaning towards political factors rather than monetary factors."

Summary: With macroeconomic uncertainties and structural changes, the market awaits answers.

Overall, this round of market changes was not driven by a single event, but rather by the combined effect of multiple factors; funds embraced gold amid uncertainty, pushing risk aversion to the forefront; and Bitcoin's next step still requires waiting for further convergence of macroeconomic and cyclical signals.