Morgan Stanley’s Gapen Confirms No Fed Rate Cut in December

Morgan Stanley’s analyst, Michael Gapen, indicated on November 18, 2025, that strong employment mitigates unemployment risks, delaying anticipated December Fed rate cuts to occur in 2026.

This forecast adjustment could influence market expectations, particularly in the cryptocurrency sector, where interest rate outlooks play a crucial role in shaping investment decisions and asset pricing.

Fed’s 2025 Rate Cut Shift: Implications and Market Response

As the impact unfolds, Morgan Stanley aligns future interest rate adjustments with these new projections, targeting a terminal rate of 3.0–3.25%. The decision has resulted in minor market recalibrations, but the broader economic landscape remains unaffected by immediate shifts.

Notable figures from the cryptocurrency sector have weighed in. Arthur Hayes, CEO of BitMEX, posted on Twitter, stating, “Higher for longer rates are a headwind for risk assets, including crypto.” Meanwhile, Binance’s CZ tweeted that if rate cuts are postponed, it could lead to further consolidation in the market.

The labor market remains resilient, and the risk of a sharp rise in unemployment has diminished. As a result, we no longer expect a December rate cut. Our base case is now for three cuts in 2026: January, April, and June, with the terminal rate settling at 3.0–3.25%.” — Michael Gapen, Thoughts on the Market Podcast

Historical Perspectives and Current Crypto Trends

Did you know? In 2023, a similar shift in Fed rate cut expectations led to a temporary increase in risk asset valuations as markets adjusted to a more supportive monetary policy environment.

Bitcoin (BTC) currently holds a price of $90,314.22, demonstrating minimal volatility with a 0.03% decline over the past 24 hours, based on data from CoinMarketCap. Its market cap stands at $1.80 trillion, with recent trading volumes of $86.77 billion, indicating a 26.38% uptick. With a circulating supply of 19.95 million BTC, the market dominance remains strong at 58.32%.

Coincu research analysts anticipate potential regulatory conversations around interest rate policies interacting with cryptocurrency dynamics. Historical patterns suggest economic policy shifts can prompt volatility, though Bitcoin’s fundamentals remain strong, which can stabilize market responses.