Bitcoin lost roughly $1,000 in minutes. Federal Reserve Chair Kevin Warsh used his first major Jackson Hole keynote to swat away softer inflation readings, and the price slid to around $78,400 after failing to hold above $80,000 earlier in the week.
The pullback clipped a rally that had briefly pushed bitcoin (BTC) past $80,000 on softer long-dated Treasury yields. Warsh, addressing the Kansas City Fed’s Jackson Hole symposium on his 100th day as chair, said the U.S. had “more work to do” on inflation and brushed aside recent cooler prints as insufficient.
“But on the price-stability side of our mandate, the numbers are more concerning,” Warsh said. “We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do.”
Personal consumption expenditures stood at 3.7% annually by the figures Warsh cited. That is nearly double the Fed’s 2% target. He noted that 54% of the goods and services the Fed tracks posted price gains above 3% over the past year. The problem, as he framed it, was not only prices but communication. Forward guidance had “overstayed its welcome,” he said, and the habit of markets trading on Fed hints rather than raw data had created a “hall-of-mirrors problem.”
“Market participants will always try to anticipate what we will do next,” Warsh said. “But we should not indulge a regime in which market participants are looking primarily to the Fed for their next trade.”
The rate backdrop was already shifting when he took the podium. CME FedWatch data showed traders had cut September rate-hike odds to 38.4%, down from 82% a month earlier, with the remainder betting on no change at all, Decrypt reported. Bitcoin Magazine, citing the same instrument after the speech, put those odds near 50%. The figures differ.
Bitcoin traded near $79,474 after touching $78,630 before the quick bounce, according to Bitcoin Magazine. The broader crypto market cap sat around $2.7 trillion, off 0.2% on the day. Warsh never mentioned crypto directly.
The week’s rally owed less to the Fed than to the Treasury. Decrypt attributed the more-than-20% weekly move to the Treasury Department’s decision to double the size of its long-dated bond buybacks, a step that pushed yields lower and the dollar softer. Bitcoin Magazine named Treasury Secretary Scott Bessent’s buyback announcement as the primary catalyst, with President Donald Trump’s endorsement of the crypto Clarity Act as a secondary tailwind.
Traders are now watching the Fed’s September 15-16 meeting, which arrives alongside a fresh round of economic projections, as the next clear catalyst for direction.
