Haciyev Reşit 
After strong U.S. employment data, expectations regarding the Federal Reserve’s interest rate policy began to shift again across global markets. Major financial institutions revised their timelines for the Fed’s first rate cut. This change in rate expectations affected not only bond and equity markets but also the cryptocurrency market. Following the statements, Bitcoin experienced a short-term pullback.
TD Securities: First Rate Cut Postponed to June
TD Securities announced that it has postponed its expectation for the first rate cut from March to June. However, the institution maintains its forecast of a total of 75 basis points in rate cuts throughout 2026. According to this projection, the Federal Reserve is expected to implement three separate 25-basis-point cuts in June, September, and December, bringing the policy rate down to 3% by year-end.
Led by Chief U.S. Macro Strategist Oscar Munoz, the TD Securities team emphasized that these cuts should not be interpreted as a sign of economic weakness. Instead, they argue that the move would represent a “normalization” of monetary policy as inflation gradually approaches target levels. The strong labor market, they noted, gives the Fed more flexibility in fighting inflation and removes the urgency for premature easing.
Supporting this outlook, Polymarket data indicates that markets see it as more likely that the Fed will keep interest rates unchanged at next month’s meeting. The growing consensus in prediction markets reinforces the perception that the Fed will maintain a wait-and-see approach in the short term, with clearer signals for rate cuts requiring more time.
New U.S. Treasury Yield Forecast
TD Securities also updated its outlook for the U.S. bond market. According to the institution:
- The 10-year U.S. Treasury yield is expected to trend downward throughout the year.
- The year-end forecast has been revised to 3.75%.
While this is higher than the previous 3.5% projection, it still reflects an expectation of lower yields compared to current levels. Citigroup issued a similar revision, shifting its expectation for the first Fed rate cut from March to May. Both institutions now align on the view that the Fed is unlikely to begin an aggressive easing cycle anytime soon.
Bitcoin Pulls Back
The postponement of rate cut expectations created short-term pressure on Bitcoin. Strong U.S. data reinforced the perception that interest rates could remain elevated for longer, limiting appetite for risk assets and leading to a noticeable pullback in Bitcoin.
According to analysts, this move reflects a combination of factors:
- Expectations of a prolonged high-interest-rate environment
- Relative strength in the U.S. dollar and Treasury yields
- Short-term profit-taking by investors
However, from a long-term perspective, the perception that the Fed has not abandoned rate cuts entirely—but merely delayed them—means the broader structural outlook for crypto markets remains intact for now. Therefore, the pullback appears to be driven more by short-term pricing adjustments and shifting expectations rather than a fundamental change in market dynamics.
Assessment
Strong U.S. employment data has prompted the Fed to adopt a more cautious approach toward rate cuts, leading major institutions such as TD Securities and Citigroup to push back their timelines. While this has created short-term pressure on Bitcoin and other risk assets, the continued expectation of rate cuts in 2026 suggests the overall outlook is not entirely negative. Upcoming inflation data and statements from Fed officials will remain key drivers for both traditional financial markets and crypto assets in the period ahead.
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