The Fed's rate cut pace in 2026 is becoming the focus of global markets. Recently, Federal Reserve Board member Milan put forward a significant view: a substantial 150 basis point rate cut is necessary next year to rescue the employment difficulties caused by current monetary tightening. He pointed out that the current inflation rate is only 2.3%, and there is enough policy space, but excessive tightening has "dragged down one million potential jobs."

Treasury Secretary Bessent also did not fall behind, strongly stating in a speech at the Minnesota Economic Club: rate cuts are the only missing element for economic growth, and the Fed must accelerate action without further delay. His stance aligns with Trump's economic agenda, believing that loose monetary policy is the foundation of a strong economic recovery.

However, the reality is much more complex. The Fed has already completed three rate cuts in 2025, totaling 75 basis points, and the federal funds rate currently remains in the 3.5%-3.75% range. But for 2026, market expectations are much more conservative—only expecting 1 to 2 rate cuts. Internal faction disputes are also intense, with dovish members like Milan insisting that rates should be lowered below neutral levels, believing that the tightening policies of the past year have gone too far.

More interesting is the timing factor. Fed Chair Powell's term will expire in May, and Treasury Secretary Bessent will lead the selection process for the new chair. Trump is very likely to seize this opportunity to reshape the Federal Reserve. As for Milan himself, the market remains on the sidelines. The game over the direction of monetary policy has just begun, with profound implications for ETH and the entire crypto market sentiment.