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Bitcoin swings after Fed Chair Kevin Warsh signals more work on inflation
After Warsh’s remarks, bitcoin briefly fell to $78,630 before trading around $79,474, while traders priced a 50% chance of a September rate hike.
Bitcoin fluctuated after Federal Reserve Chair Kevin Warsh delivered his first major speech since taking the role, saying the central bank has “more work to do” to fight inflation. Bitcoin Magazine said the leading cryptocurrency dropped and then rebounded, trading recently at $79,474 after hitting a low of $78,630.
Warsh highlighted concerns on the Fed’s price stability side, pointing to inflation that is not yet moving to the central bank’s target “clearly and at sufficient speed.” He said the Fed must be confident underlying inflation is heading toward its objective, otherwise it would still have work to do.
Bitcoin Magazine also tied the market reaction to expectations around interest rates, noting bitcoin has previously fallen when investors conclude the Fed views inflation as too high, reducing the odds of a rate cut. Following the speech, traders priced in a 50% chance of a rate hike in September.
Beyond the Fed, the outlet pointed to earlier support for crypto sentiment, including a U.S. Treasury plan to double the size of its long-dated bond buybacks, which it said pushed yields lower and strengthened demand for non-yielding assets. Bitcoin Magazine also cited President Donald Trump’s comments that a proposed crypto Clarity Act would help establish a framework for distinguishing between digital assets that are securities, commodities, or payment stablecoins.
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