TLDR
- The Federal Reserve is expected to cut interest rates by 25 basis points to 4% on Wednesday, a total of 150 basis points of easing since September 2024
- Microsoft reports Q1 2026 earnings on Wednesday with Azure cloud revenue forecast at $23 billion, up 38%
- Bitcoin trades at $115,000, up 1.7% in 24 hours, while XRP breaks above 200-day moving average
- Fed Chair Powell may signal an end to quantitative easing when bank reserves fall below $3 trillion
- The Bank of Japan’s interest rate decision on Thursday and the trade summit between Trump and Xi are adding to market-changing events
The cryptocurrency market faces a packed week of economic data and corporate earnings that could determine price direction until the end of the year. Bitcoin is currently trading at $115,000 after gaining 1.7% in the past day.
The Federal Reserve holds its policy meeting on Wednesday with CME Fed funds futures pricing almost certain of a 25 basis point rate cut. This would cut the benchmark rate to 4% and mark a continuation of an easing cycle that began in September 2024. Markets also expect another cut in December.
Interest rate cuts typically support risk assets such as cryptocurrencies by lowering borrowing costs and increasing liquidity. The Fed has already cut interest rates by 125 basis points since last September. A further reduction of 25 basis points would bring total easing to 150 basis points.
Fed Chairman Jerome Powell’s press conference on Wednesday afternoon will provide insight into future monetary policy. Powell is expected to focus on weakness in the labor market while characterizing inflationary pressures as temporary. The Fed will not release economic forecasts or interest rate forecasts at this meeting.
Quantitative tightening program is coming to an end
Powell recently indicated that the Fed may soon end its balance sheet program known as quantitative easing. The banking system’s reserves fell below $3 trillion, approaching the minimum level required for healthy market functioning. Ending quantitative easing could bolster crypto markets even without immediate balance sheet expansion.
Microsoft releases results for the first quarter of 2026 after the stock market closes on Wednesday. Analysts expect earnings of $3.68 per share on revenue of $75.5 billion. Azure cloud platform revenue is expected to reach $23 billion, representing 38% growth.
The tech giant’s infrastructure spending is drawing a lot of attention from crypto and AI investors. Microsoft plans to spend $30 billion on data center and cloud equipment this quarter. Bank of America analysts estimate full-year capital spending at $125 billion, $10 billion above consensus.
Technology revenue and global trade development
Apple, Alphabet and Meta also report results this week. Investors will scrutinize AI-related spending, which has driven tech stocks higher since 2023. Any slowdown in infrastructure investment could trigger selling across risk assets.
XRP gained 3% in 24 hours and crossed its 200-day moving average of $2.60. Ether and solana showed similar gains. The cryptocurrency market shows strength ahead of the Fed decision.
The Bank of Japan meets on Thursday with expectations of unchanged interest rates. Markets are pricing in potential cuts in early 2026. Governor Ueda’s comments could move currency and crypto markets.
President Trump will meet with Chinese President Xi Jinping on Thursday in South Korea during the APEC summit. Both countries gave positive statements about trade negotiations. A deal can increase risk sentiment while disappointment can trigger selling.
Bitcoin needs to break above its 50-day moving average of $114,250 to confirm bullish momentum. The 200-day moving average of $108,800 provided support during the recent weakness.
