Market update - February 13th, 2026

Fed minutes, not much CLARITY for the bulls

Crypto bulls hoping that this week's macro and legislative calendar would spark a long awaited catalyst have been left empty-handed.

For starters, the release of the Fed Minutes on Wednesday largely confirmed that January was a hawkish hold; the committee is leaning hawkish in its risk assessment amid its dual mandate policy. It is the predominant view of the committee that "additional policy easing may not be warranted until there was clear indication that the progress of disinflation was firmly back on track". It was also acknowledged that, in light of tariffs, progress towards the 2% inflation objective might be slow and uneven.

The hawkish tilt went further still, with several committee members wanting there to be two-sided language, reflecting possible rate increases in the future, though this appears more precautionary:

"Several participants indicated that they would have supported a two-sided description of the Committee's future interest rate decisions, reflecting the possibility that upward adjustments to the target range for the federal funds rate could be appropriate if inflation remains at above-target levels”, the minutes said. 

Meanwhile, today's PCE print does in fact vindicate the hawks, coming in at 0.4% versus consensus of 0.3%. Services inflation remains the dominant contributor (0.25%), with durable goods (0.065%) picking up pretty significantly from last month. The minutes had indeed flagged this would be likely, due to tariff pass-through into core goods.

To round out the week, today's Advance GDP print came in well below expectations, at 1.4% against the consensus of 2.8%. Even though Fed minutes had flagged a ~1% drop due to the government shutdown, this was already baked into expectations, and even leading prediction markets had 80% odds of a print above 2%. While in the near term this might be a stagflationary whiff, it does open up the idea that the Fed's risk assessment might be behind the curve and policy too restrictive, a factor that would support bitcoin in the longer run as expectations shift for looser monetary policy. If growth continues to deteriorate while inflation cools, the Fed's hand could eventually be forced, and that pivot would be a meaningful tailwind for bitcoin.

CLARITY Act stuck between a rock and a hard place

On the legislative front, things aren't looking much better. The CLARITY Act remains stuck in the Senate with no markup date scheduled since January's cancellation. The core blocker is stablecoin yield: banks want it banned outright, while the crypto industry, led by Coinbase's Brian Armstrong, wants it preserved. This dispute has nothing to do with market structure but is holding the entire bill hostage.

The White House hosted a third round of negotiations yesterday to break the impasse, and while "progress" was reported, no deal has emerged. Reports suggest officials confiscated phones and kept participants past the scheduled two hours to force common ground. A March 1 deadline has been set for both sides to reach an agreement, with Senator Moreno targeting April passage ahead of the midterms. Polymarket odds on the bill passing spiked to around 85-90% earlier this month and have since settled at ~75%. So passage appears likely, but the real question is whose interests the final text will favour.

For now, the title of the bill promises clarity, but that's exactly what's missing from both the Fed and Congress. Still, it is encouraging that bitcoin and the broader crypto market have held up relatively well through what has been a tough week on both the macro and legislative fronts.