Markets Brace for FOMC as 40% of Fund Managers Suddenly Remember Rate Hikes Exist 📈

Crypto markets traded cautiously on Monday as investors awaited the US Federal Open Market Committee's interest rate decision, with derivatives data and a fresh Bank of America fund manager survey signaling a notable shift in expectations toward tighter US monetary policy. The survey showed nearly 40% of respondents now expect at least one rate hike within the next 12 months, up sharply from 16% in the previous month, while broader risk assets, including $BTC and $ETH, continued to digest the move.

The repricing comes against a backdrop of sticky US inflation, recent escalation in US-Iran tensions that have lifted oil prices, and renewed debate over the Federal Reserve's policy trajectory. Higher energy costs have fed into headline inflation prints, complicating the Fed's path and prompting traders to dial back bets on near-term rate cuts. Crypto market participants, meanwhile, are watching the liquidity implications closely, as tighter US policy historically reduces risk appetite for digital assets.

The FOMC meeting remains the central event of the week for both traditional and crypto markets, with the committee widely expected to hold rates in the near term while signaling its longer-term stance. According to the report, investors appear focused less on the immediate decision and more on forward guidance, particularly any indication that the Fed is preparing to delay anticipated cuts or resume tightening if inflation persists.

Beyond the rate path, analysts cited in industry coverage note that the Bank of America survey also reflected a broader shift in sentiment, with fund managers increasingly flagging hawkish policy as a near-term risk to portfolios. Crypto-related funds have seen muted flows in recent sessions, and options traders have pushed implied volatility higher into the FOMC event, a pattern consistent with major macro catalysts.

The Fed's communication will arrive as geopolitical risk premiums remain elevated and as markets continue to weigh the interaction between energy prices, inflation, and monetary policy. With the FOMC decision due this week, crypto traders are positioning for heightened two-way volatility regardless of the committee's headline rate move.