Fed Chair Kevin Warsh warns inflation work remains, Bitcoin drops to $78,700

Warsh says inflation is the top priority

Federal Reserve Chair Kevin Warsh gave his keynote speech at the Kansas City Fed’s annual Jackson Hole symposium on Friday. He said the central bank’s main job is to bring inflation down to its 2% target. “The responsibility for 65 months of sustained, elevated inflation sits squarely with the central bank,” Warsh said. He added that the Fed must be “confident that underlying inflation is moving to our objective, clearly and at sufficient speed.”

Markets react to hawkish tone

After the speech, Bitcoin dropped to about $78,700. The broader crypto market also fell, with Ethereum, XRP, and Solana all down more than 1.8%. U.S. stock prices slid a little, and bond yields rose slightly. Traders quickly updated their expectations for interest rates. According to CME FedWatch data, the chance of a September rate hike jumped to 42%, up from 35% the day before.

Split with Treasury over rates

The speech highlighted a clear divide between the Fed and the Treasury. Treasury Secretary Scott Bessent recently promised to intervene in the bond market to keep long-term interest rates low. Warsh, however, has supported letting market forces decide where rates go. Bessent argued that inefficiencies were pushing bond yields higher than they should be, while Warsh stressed that keeping prices stable is the Fed’s core mandate.

What this means for crypto investors

Warsh’s remarks remind investors that the Fed is not done fighting inflation. Higher interest rates usually make borrowing more expensive and can cool economic activity. For crypto markets, that often means lower demand for risk assets like Bitcoin. Traders are now watching the September Federal Reserve meeting closely, as any hint of further tightening could add pressure to digital asset prices.

• Fed Chair Kevin Warsh called inflation the “predominant focus” at Jackson Hole.
• Bitcoin slipped to $78,700 after the speech.
• September rate-hike odds rose to 42%, up from 35%.
• Treasury Secretary Scott Bessent and Warsh disagree on long-term bond yields.

Source

• CoinDesk