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Bitcoin near $63,000 as traders weigh Fed inflation reaction uncertainty

Rate markets put roughly 66% odds on a September Fed hike, while Warsh said the Fed could revisit its strategy in January 2027 based on new inflation framework work.

Reported · Written up by our desk · Bitcoin

Bitcoin was trading near $63,000 as traders tried to price how the Federal Reserve weighs inflation gauges under a framework defined around “underlying inflation,” according to CryptoSlate.

The outlet notes that the Fed chair described the reaction function in terms of underlying inflation but declined to spell out how the central bank combines specific indicators. The range of gauges cited spans headline PCE at 3.7%, core PCE at 3.3%, the Atlanta Fed sticky-price CPI at 2.8%, Cleveland Fed 10-year expected inflation at 2.43%, and the Dallas Fed trimmed-mean PCE at 2.2%.

CryptoSlate also highlights that Kevin Warsh pointed to a January strategy document that keeps PCE as the formal objective, while referencing Goodhart’s Law and saying the Fed could revisit its strategy in January 2027. The article says the Fed created five monetary-policy task forces on July 9, including a Data Sources group and an Inflation Frameworks group, with Warsh planning to review their work ahead of Jackson Hole, and leaving open that early findings could shape his August speech.

For timing, CryptoSlate cites the next hard policy window as the Sept. 15-16 FOMC meeting with a new Summary of Economic Projections. It adds that the Fed held its target range at 3.50% to 3.75% through a 9-3 vote, and that rate markets had pushed September hike odds to around 65% on July 31, while the 10-year Treasury yield ended July near 4.743% and the 30-year reached 5.274%, the highest in 19 years.

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