Kevin Warsh’s Fed debut shocks cryptocurrencies as interest rate cut expectations fade

New Federal Reserve Chairman Kevin Warsh concluded his first FOMC meeting without changing interest rates.

Officials voted 12-0 to keep the federal funds target range at 3.50-3.75%, according to a statement from the FOMC.

The Fed said economic activity is expanding at a steady pace, while inflation remains above its 2% target. It also said some of the price pressure was due to supply shocks and energy costs. The statement added that the committee will “achieve price stability.”

The tone has changed since the Powell era.

Warsh’s first press conference attracted attention because his style differed from Jerome Powell’s more direct communication approach. The New York Times reported that Warsh used phrases such as “first principles,” “alternative frameworks” and the Fed’s “authority.”

The report also said Mr. Warsh acknowledged that he was the only Fed policymaker who did not submit a dotplot forecast. The decision put more focus on how he plans to guide the market, with no clear path forward for future rate cuts.

Additionally, Warsh used the press conference to announce a broad review of the central bank’s operations. He named five task forces covering inflation, communications, economic indicators, productivity and the labor market, Reuters reported.

“We will appoint task forces in each of five areas that are core to the broader operation of monetary policy,” Warsh said. He added that the groups could begin work in the coming weeks and provide initial views in the fall.

Cryptocurrency monitors high rate risks

As previously reported by crypto.news, Warsh kept rates unchanged as Bitcoin fell to around $65,430 and Ethereum traded near $1,770. The report said the Fed’s forecasts showed nine Fed officials expect at least one interest rate hike this year.

Earlier crypto.news reported that Warsh’s swearing-in had already tested expectations for a rate cut ahead of the June meeting. Traders were weaning bets on a rapid easing as inflation concerns and energy risks remained in focus.

Bitcoin waits for inflation data

The Fed’s decision shows little sign that liquidity will become easier in the crypto market in the near term. Rising interest rates could continue to put pressure on Bitcoin and other risky assets, as investors often prefer cash and short-term debt when yields remain high.

crypto.news previously reported that Bitcoin traders are bracing for the Fed’s decision as market odds strongly suggest there will be no interest rate cut in June. The next market test will come from Warsh’s upcoming comments on inflation data, labor statistics and policy.

Mr. Trump had been pushing for rate cuts even before Mr. Warsh took office, but the new chairman did not provide a timeline for rate cuts. President Trump, while praising Warsh, responded mildly to the decision to put the deal on hold.