TLDR
- Federal Reserve expected to cut rates 25 basis points to 4% on Wednesday, total 150 basis points of easing since September 2024
- Microsoft reports Q1 FY2026 earnings Wednesday with Azure cloud revenue forecast at $23 billion, up 38%
- Bitcoin trading at $115,000, up 1.7% in 24 hours, while XRP breaks above 200-day moving average
- Fed Chair Powell may signal end to quantitative tightening as bank reserves drop below $3 trillion
- Bank of Japan rate decision Thursday and Trump-Xi trade summit add to market-moving events
The cryptocurrency market faces a packed week of economic data and corporate earnings that could determine price direction through year end. Bitcoin currently trades at $115,000 after gaining 1.7% over the past day.
The Federal Reserve holds its policy meeting Wednesday with CME Fed funds futures pricing in near certainty of a 25 basis point rate cut. This would lower the benchmark rate to 4% and mark the continuation of an easing cycle that began in September 2024. Markets also expect another cut in December.
Rate reductions typically support risk assets like cryptocurrencies by lowering borrowing costs and increasing liquidity. The Fed has already cut rates by 125 basis points since last September. Another 25 basis point reduction would bring total easing to 150 basis points.
Fed Chair Jerome Powell’s press conference Wednesday afternoon will provide insight into future monetary policy. Powell is expected to focus on labor market weakness while characterizing inflation pressures as temporary. The Fed will not release economic forecasts or rate projections at this meeting.
Quantitative Tightening Program Nearing End
Powell recently indicated the Fed may soon end its balance sheet runoff program known as quantitative tightening. Banking system reserves fell below $3 trillion, approaching the minimum level needed for healthy market functioning. Ending quantitative tightening could boost crypto markets even without immediate balance sheet expansion.
Microsoft releases first quarter fiscal 2026 results after market close Wednesday. Analysts project earnings of $3.68 per share on revenue of $75.5 billion. Azure cloud platform revenue is forecast to reach $23 billion, representing 38% growth.
The tech giant’s infrastructure spending draws close attention from crypto and AI investors. Microsoft plans to spend $30 billion on data centers and cloud equipment this quarter. Bank of America analysts estimate full year capital expenditures at $125 billion, $10 billion above consensus.
Tech Earnings and Global Trade Developments
Apple, Alphabet, and Meta also report earnings this week. Investors will scrutinize AI-related spending that has driven technology stocks higher since 2023. Any slowdown in infrastructure investment could trigger selling across risk assets.
XRP gained 3% over 24 hours and moved above its 200-day moving average at $2.60. Ether and solana posted similar gains. The cryptocurrency market shows strength ahead of the Fed decision.
The Bank of Japan meets Thursday with expectations for unchanged rates. Markets price in potential cuts by early 2026. Governor Ueda’s comments could move currency and crypto markets.
President Trump meets Chinese President Xi Jinping Thursday in South Korea during the APEC Summit. Both countries issued positive statements about trade negotiations. A deal could boost risk sentiment while disappointment might trigger selling.
Bitcoin needs to break above its 50-day moving average at $114,250 to confirm bullish momentum. The 200-day average at $108,800 provided support during recent weakness.
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