Fed Rate Expectations and Bitcoin ETF Flows Highlight Diverging Market Signals

According to a recent LinkedIn post from Kraken, market-implied odds of a U.S. Federal Reserve rate cut in 2026 reportedly moved above 30% following Kevin Warsh’s nomination hearing. The post notes that investors are focused on the tone of the latest FOMC press conference, with policy rates expected to remain unchanged in the near term.

The company’s LinkedIn post suggests that Fed Chair Jerome Powell’s policy framework and guidance could influence how upcoming Q1 GDP and PCE data are interpreted by markets. This framing points to an environment where macro signals on growth and inflation may continue to drive risk sentiment and valuations across asset classes.

While macro attention is described as centering on the Fed, the post highlights a “different picture” in crypto markets, noting that Bitcoin’s correlation with equities has fallen to a two‑month low of 0.45. Reduced equity correlation may be interpreted by some investors as a sign of partial decoupling, which could affect portfolio allocation strategies that use Bitcoin for diversification.

The LinkedIn post also cites strong spot demand via exchange-traded funds, indicating that Bitcoin ETFs have reportedly seen inflows on 76% of sessions this month, totaling about $2.5 billion and reaching a six‑month high. Sustained ETF inflows can be viewed as a proxy for institutional and retail engagement, potentially supporting liquidity and fee-generating volumes for platforms exposed to Bitcoin trading and custody.

The post references Kraken’s “Macro Minute” content as covering these developments, positioning the firm as an active commentator on the interaction between monetary policy and digital asset markets. For investors, the themes raised in the post underscore how shifts in Fed expectations, cross-asset correlations, and ETF flows may influence medium-term demand for crypto trading, derivatives, and related services in which Kraken participates.