Last updated on March 10th, 2026 at 11:55 am
The US Federal Reserve is moving into a more restrained phase of monetary expansion that could support asset prices without triggering the explosive rally many Bitcoin investors once expected, according to economist and Bitcoin advocate Lyn Alden.
My public February newsletter is out now, and focuses on the Fed’s shift toward balance sheet expansion, Japan’s rising bond yields, and precious metals volatility.
Enjoy:https://t.co/B87EYBUp8u pic.twitter.com/oTr9OUvm1w
— Lyn Alden (@LynAldenContact) February 8, 2026
In her February 8 investment strategy newsletter, Alden said the central bank is likely to expand its balance sheet at a pace broadly aligned with nominal GDP growth and total bank assets. That approach, she noted, points to “mild” asset price stimulation rather than a return to aggressive post-crisis money printing.
Alden added that her strategy remains focused on owning high-quality, scarce assets while actively rebalancing away from overheated markets and toward sectors that are still under-owned.
Fed leadership uncertainty rattles markets
Market nerves were heightened following US President Donald Trump’s nomination of Kevin Warsh as the next Federal Reserve chair. Traders largely view Warsh as more hawkish on interest rates than other potential candidates, raising concerns about tighter monetary conditions ahead.
Interest rate expectations play a critical role in crypto markets. Easier monetary policy and credit expansion are typically seen as supportive for risk assets, while higher rates and tighter liquidity often pressure prices and slow economic growth.
Rate cut hopes fade ahead of March FOMC
Expectations for a near-term rate cut continue to weaken. According to CME FedWatch data, just 19.9% of traders now anticipate an interest rate cut at the Federal Open Market Committee (FOMC) meeting in March, down from 23% earlier in the week.
Current Fed Chair Jerome Powell has offered mixed signals despite cutting rates several times in 2025. After the December FOMC meeting, Powell warned that inflation risks remain skewed to the upside, while employment risks are tilted lower, calling the policy outlook “challenging.”
With Powell’s term ending in May 2025 and Warsh yet to be confirmed by the US Senate, investors remain uncertain about the Federal Reserve’s policy direction heading into 2026.
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