Key Takeaways from Fed Chair Kevin Warsh’s IMF Fireside Chat as Bitcoin & XRP Hold Gains

Bitcoin and XRP rebounded and held upside momentum on Friday as Fed Chair Kevin Warsh declined to offer clues on whether the FOMC would hike rates again later this month. Stock and crypto markets plunged after hotter US CPI and PPI inflation data reinforced concerns of Fed rate hikes.

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Fed Chair Kevin Warsh Speech: Key Highlights

Kevin Warsh joined IMF Managing Director Kristalina Georgieva for a discussion during the IMF-World Bank Annual Meetings. He reiterated the Fed’s commitment to price stability after the central bank’s first rate hike this year in September to 3.75-4% amid sticky inflation, elevated oil prices, and strong investment demand.

Fed chair refused to preview the October 27–28 FOMC meeting. “I don’t prejudge meetings. I don’t believe in saying now what I might do at the meetings we have in the balance of this year,” Warsh said. This continues his preference for data-dependent monetary policy decisions over forward guidance.

However, he noted that most central banks have tightened monetary policy to combat inflation, describing it as a shared fight with no free riders. He also discussed resilience in the US and other economies amid geopolitical conflicts and elevated energy prices. Notably, US retail sales data came in higher than expectations for two consecutive months.

In addition, Kevin Warsh defended September’s rate hike as necessary and called AI “probably the most consequential change to the US and the global economy in my lifetime.” He warned the near-term path will be “very bumpy.” Currently, AI-related investment is boosting demand, with the U.S. benefiting from a broader investment surge beyond AI.

He highlighted that structural growth and investment tailwinds are giving the U.S. economy strength. However, investors remain cautious amid market volatility after hot US CPI and PPI inflation data.

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Bitcoin and XRP Prices Rebound

Asia stock markets, US stock futures, and crypto prices edged higher on Friday as investors anticipate a Fed rate pause in October. CME FedWatch Tool shows a decline in 25 bps Fed rate hike odds from 33% to 15% in just a few hours. However, concerns about a December Fed rate hike remain.

Meanwhile, 10-year Treasury yields were largely stable near 5.08% after Fed Chair Kevin Warsh remarks. The U.S. dollar index (DXY) dropped to 101.83. Oil prices dipped to almost $97 per barrel as the IEA plans to fast-track its remaining emergency oil stock release and Russian diesel supply. Meanwhile, Iran strikes tankers in the Strait of Hormuz.

Bitcoin has jumped more than 2% over the past 24 hours, currently trading near $82,300. Price rebounded from $79,805 to hit a 24-hour high of $82,508 amid buy-the-dip sentiment. It now holds above the key 50-day moving average level.

XRP price jumped strongly and holds near $1.35, after a drop to $1.28 over the past 24 hours. As CoinGape reported, a popular analyst predicted a fall towards $1.25 before buying pressure to reclaim $1.42 and $1.60 amid strong upside momentum.