Cryptocurrency markets are facing a fast-moving repricing of US monetary policy expectations, and macro trader Alex Krueger says that even after last week’s sharp shift, futures curves still fail to discount what Trump-aligned Federal Reserve leadership could look like.
Fed to reduce mispricing by setting up crypto repricing event
In a post on The table shows an expected federal funds rate of 3.47% at the FOMC meeting on April 29, 2026 (347 basis points), then drifting to 3.29% on June 17, 2026 (329 basis points), to 3.10% on September 16, 2026 (310 basis points), and to 2.99% on December 9, 2026 (299 basis points).
In other words, the curve is pricing in roughly 48 basis points of easing between late April and early December 2026, about two quarter-point cuts across that period – implying a relatively gradual decline towards just under 3%.
Krueger’s basic claim is that this path is inconsistent with the policy preferences he associates with the Trump camp, and thus is not compatible with appointing an “overly dovish” president. He considers the April 2026 meeting to be the last meeting under Chairman Jerome Powell, whose four-year term ends in mid-May 2026, and then treats the June 2026 meeting as the first under a new presidency.
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In contrast to this shift, Krueger points to Fed Governor Stephen Meiran – whom he sees as a proxy for Trump’s global monetary instincts – as calling for a much faster return to neutrality. According to Krueger’s account, Meiran claimed that the “appropriate federal funds rate” is “roughly 2% to 2.5%,” linked the tougher stance this year to the neutral rate hike, and described his divergence from his colleagues as centered on the “speed of cuts,” not the destination.
Krueger also highlights Miran’s preference for “50 basis point cuts” over 25 basis point steps as a way to return policy to neutral. By Krueger’s calculations, a futures curve that provides only about 50 basis points of easing from the first post-Powell meeting in June 2026 through December 2026 is not a truly Trump-era price curve willing to withstand larger moves to the front.
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Simply put, he sees the market remaining entrenched in a Powell-style glide path, even as political risks edge toward further abrupt easing. Krueger concludes, “The Trump camp wants faster and bigger cuts, and lots of them. A mere 50 basis point Fed cut between the new president’s FOMC in June and December 2026 is not enough. That’s why he insisted that a Trump-appointed Fed chair not be priced in.”
A rate cut in December appears likely
The timing of Krueger’s warning is important because the front end has already seen a major swing. Last week, traders sharply increased the likelihood of another cut at the Fed’s December meeting after New York Fed President John Williams said interest rates could fall “in the near term,” a statement that pushed implied odds of a quarter-point move in December into the mid-70% range on CME FedWatch, up from roughly 40% a day earlier.
In parallel, Goldman Sachs chief economist Jan Hatzius reiterated the Fed’s lowering baseline in December, and then again in March and June 2026, lowering the policy range to roughly 3.00% to 3.25%. “We expect another Fed cut in December, followed by two more steps in March and June 2026 raising the funds rate to 3-3.25%,” Hatzius said.
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Economists at Goldman Sachs expect the Fed to cut interest rates in December, followed by some additional cuts in 2025, keeping interest rates just above 3%. Chief Economist Jan Hatzius warned that the economy may slow more than expected, requiring…
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Its trajectory is modestly more pessimistic than what the curve discounted earlier in the month, but it still resembles the gradient built into Kroger’s CME schedule: sequential steps of 25 basis points, aiming for an early 2026 rate around the low 3% territory rather than a rapid decline toward the low 2 levels.
For cryptocurrency markets, the dispute is less about whether cuts are coming and more about the speed and eventual price. Cryptocurrencies are structurally supported by shifts in dollar liquidity and real interest rate expectations; What Krueger is referring to is a scenario in which the “destination” of the curve, especially its pace, remains too conservative compared to the Fed’s potential policy reorientation.
If traders are right that the repricing Williams sparked is the beginning of a slower, data-driven easing cycle, then current crypto asset valuations already include the relevant macro impetus.
If Krueger is right, the curve is still missing a regime change in the reaction function – one in which larger cuts compress cash returns more quickly than expected, sharpen risk, force another round of duration across assets and repricing liquidity. This gap between the Powell-era cliff and the Trump-era shock trajectory is what he means when he says the ultra-cautious chair is “not priced in” in cryptocurrency markets.
At the time of publication, the total market cap of cryptocurrencies was $2.92 trillion.
Featured image created with DALL.E, a chart from TradingView.com
The post Crypto Markets Underestimate Trump-Style Rate Cuts: Expert first appeared on Investorempires.com.
