JPMorgan Forecasts Fed Rate Hike by 2027, Crypto Market Sees Cuts

TLDR

• JPMorgan predicts the Federal Reserve will raise interest rates by 25 basis points in the third quarter of 2027.
• The bank expects the Fed to keep rates steady between 3.5% and 3.75% through 2026.
• Crypto analysts believe the Fed will lower interest rates this year, which could boost Bitcoin and other risk assets.
• Bitcoin is highly sensitive to changes in interest rates, with lower borrowing costs potentially driving up its price.
• Lukman Otunuga of FXTM anticipates Bitcoin could rebound in 2026 if interest rates decrease and supply tightens.

JPMorgan predicts the U.S. Federal Reserve’s next move will be an interest-rate increase, but not before the third quarter of 2027. The bank’s outlook contradicts the expectations of many crypto analysts, who foresee a decrease in borrowing costs. These analysts argue that lower rates would drive greater risk-taking and benefit cryptocurrencies like Bitcoin, which are sensitive to interest rate changes.

JPMorgan Expects Rate Hike in 2027

JPMorgan forecasts that the Fed will maintain its target interest rate between 3.5% and 3.75% for the rest of 2026. The bank also expects a 25 basis-point increase in the third quarter of 2027. This prediction contrasts sharply with the views reflected in CME’s fed fund futures, which suggest traders anticipate two rate cuts this year.

JPMorgan’s stance is more cautious compared to crypto analysts, who argue that rate cuts are more likely. Crypto bulls, especially those focused on Bitcoin, believe lower interest rates would stimulate risk appetite across the economy. Bitcoin’s sensitivity to changes in fiat liquidity means that lower rates could drive its price higher.

While JPMorgan remains firm on the possibility of a rate hike, many in the crypto space predict the opposite. Analysts expect the Fed will lower borrowing costs this year to stimulate economic activity. Bitcoin often thrives when interest rates are low, as cheaper borrowing costs encourage investment and speculation in high-risk assets.

Lukman Otunuga, a senior market analyst at FXTM, mentioned that Bitcoin may experience a rebound in 2026. He believes that lower interest rates and limited supply could drive prices higher. “Despite a difficult 2025, bitcoin may stage a comeback in 2026,” Otunuga said.

Goldman Sachs and Barclays Update Rate Cut Projections

JPMorgan’s prediction aligns with some patterns seen in the 10-year Treasury yield, which the bank notes may rise toward 6%. The yield currently sits at approximately 4.18%. While JPMorgan’s outlook favors a tighter monetary policy, the bank does leave room for possible rate cuts later if inflation decreases or the labor market weakens.

Other investment banks like Goldman Sachs and Barclays have also adjusted their rate-cut forecasts. Following the latest U.S. employment data, which showed a decline in the jobless rate, both banks now expect rate reductions later in 2026. Goldman’s and Barclays’ updated forecasts predict rate cuts in September and December instead of earlier in the year.

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