Bitcoin Bounces as Kevin Warsh Declines to Comment on July Fed Rate Decision

Bitcoin has gained today, rising from its intraday low below the psychological $58,000 level. This follows Fed Chair Kevin Warsh’s panel discussion today, in which he declined to comment on the path for monetary policy, reiterating his stance against forward guidance.

Kevin Warsh Declines To Comment On Monetary Policy, Bitcoin Gains

Speaking at an ECB Forum, the Fed Chair declined to comment on whether the Fed will raise interest rates at the July FOMC meeting, while signaling that it will continue to make decisions based on incoming data. This also further reiterates Warsh’s stance against forward guidance, with the Fed chair already cutting out hints of future rate decisions following his first FOMC meeting last month.

Bitcoin gained as the Fed Chair failed to comment on the path for monetary policy. The BTC price is currently trading at around $59,700, up almost 2% from an intraday low below $58,000, according to TradingView data.

It is worth noting that market participants are currently betting that the Fed will leave interest rates unchanged at the July FOMC meeting. There is currently a 72.7% chance of that happening, according to CME FedWatch data.

This comes despite inflation concerns, with inflation rising due to the U.S.-Iran war. However, Warsh said that inflation expectations over the first four weeks of this period have declined, and that inflation risks have eased, representing a positive for Bitcoin. He also reiterated his commitment to bring inflation down to their 2% goal.

Rate Hike Bets Still On

Market participants continue to price in a Fed rate hike this year despite Kevin Warsh’s comments about inflation risks easing. Polymarket data shows a 54% chance that the Fed will increase interest rates by year-end.

The possibility of a Fed rate hike is notably one of the factors that is putting selling pressure on Bitcoin, with a hike bearish for the leading crypto and the broader crypto market. The possibility of Strategy selling up to $1.25 billion in BTC is another contributing factor.

However, Morgan Stanley recently predicted that the Fed is likely to hold rates steady throughout this year. However, the bank warned that Fed rate hikes could return if inflation persists or the unemployment rate drops.