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- The market is split on whether the Fed will prioritize cooling inflation or a resilient labor market.
- Analysts expect high price swings in Bitcoin and altcoins following the 2:00 PM ET release.
- Probabilities for a March rate cut have plummeted to under 8% following recent employment data.
Financial markets are bracing for a pivotal moment this Wednesday, February 18, 2026, as the Federal Reserve prepares to release the minutes from its January policy meeting. For the cryptocurrency sector—often treated as a high-octane barometer for global liquidity—the document represents more than just a recap; it is a roadmap for where Bitcoin and altcoins might head next.
Shifting Expectations in a “Higher for Longer” Climate
The core of the current market tension lies in how traders perceive the Fed’s timeline. While the central bank held rates steady at 3.5%–3.75% in January, the internal debate is what matters now. Investors are scouring the text for signs of a “dovish” pivot—essentially, any indication that officials are ready to resume the rate-cutting cycle they paused at the end of last year.
However, recent data has complicated the narrative. Despite a cooler-than-expected CPI reading of 2.4% in January, a surprisingly resilient labor market has forced a reality check. After nonfarm payrolls grew by 130,000, the probability of a rate hold in March surged to over 92%. If the minutes echo Chair Jerome Powell’s “no rush” sentiment, the “higher for longer” reality could trigger significant selling pressure across digital assets.
The Divergence Between Inflation and Employment
The Fed is currently caught between two conflicting signals. On one hand, inflation is finally nearing the 2.0% target, marking its lowest point in four years. On the other, the labor market refuses to cool significantly, giving the Fed little incentive to inject more liquidity through cuts.
Also Read: Bitcoin Dips Ahead of FOMC Minutes and Powell Speech: Key Levels to Watch
Analyst MANI recently highlighted that the crypto market’s reaction will hinge on “patience versus progress.” If the minutes emphasize upside risks to inflation or the strength of the economy, Bitcoin could see downward pressure as capital rotates back into “safer” yields. Conversely, if there is a noted concern about slowing growth, the case for a 2026 rate-cut cycle—currently priced in at roughly 2.5%—remains alive.
Managing Volatility in a High-Stakes Week
For crypto investors, the immediate future is likely to be defined by volatility. Historical trends suggest that any hawkish surprise from the FOMC minutes typically hits high-beta altcoins the hardest. As the March 18 rate decision looms, the “wait-and-see” approach adopted by the Fed has turned into a “wait-and-worry” period for traders.
While the long-term outlook for 2026 still anticipates some easing, the January minutes will reveal just how much “internal friction” exists among policymakers regarding the timing of that first move.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m your translator between the financial Old World and the new frontier of crypto. After a career demystifying economics and markets, I enjoy elucidating crypto – from investment risks to earth-shaking potential. Let’s explore!
