JPMorgan’s chief global strategist David Kelly expects the Federal Reserve to keep interest rates exactly where they are at next week’s FOMC meeting. The current federal funds rate sits at 3.50%-3.75%, and market pricing puts the probability of no change at north of 99%.

The case for standing pat

The Fed’s two-day meeting on June 16-17 marks a notable moment: it will be new chair Kevin Warsh’s first vote at the helm. Kelly’s analysis suggests Warsh will prioritize stability and institutional continuity over any dramatic policy pivot.

The Fed cut rates three times in late 2025, trimming the federal funds rate by a total of 75 basis points. Since then, the central bank has been in wait-and-see mode, letting those cuts work through the economy while keeping a close eye on inflation data and fiscal dynamics.

JPMorgan’s broader forecast calls for just two rate cuts across all of 2026, with one additional cut penciled in for 2027. Kelly’s reasoning centers on what he sees as persistent inflationary pressures combined with fiscal factors that make aggressive easing risky.

What this means for crypto

A hold at 3.50%-3.75% is still a relatively elevated rate environment compared to the near-zero rates that fueled the crypto bull runs of 2020-2021. Bitcoin has historically shown notable sensitivity to Fed announcements this year. On certain Fed decision days in 2026, Bitcoin dropped more than 5%, a pattern that tends to emerge when the Fed’s tone leans hawkish or when markets read between the lines of the post-meeting statement.

When 99% of the market already knows what’s coming, the decision itself is already priced in. The volatility comes from the press conference, the dot plot projections, and any changes in the Fed’s forward guidance language. JPMorgan’s outlook emphasizes caution specifically around this dynamic, noting that elevated inflation readings and fiscal uncertainty create an environment where the Fed could shift its tone without actually moving rates.

Positioning ahead of the decision

If the Fed reaffirms that two cuts remain on the table this year, crypto could catch a modest bid as markets price in eventual easing. If the language tightens, or if the dot plot shifts to suggest fewer cuts, expect digital assets to feel the pressure first. Crypto markets trade 24/7 and react faster than equities to macro surprises.

The June meeting also sets the stage for the next few months of Fed decisions. With Warsh establishing his leadership style and the committee navigating between conflicting economic signals, every meeting becomes a potential inflection point.