Bitcoin breaks above $60,000 after Fed Chair Warsh said inflation risks has come down
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- Bitcoin climbed back above $60,000, gaining more than 2% over 24 hours, after Fed Chair Kevin Warsh said "inflation risks have come down" and reaffirmed the central bank's 2% inflation target at the European Central Bank's annual forum in Sintra, Portugal.
- Warsh declined to provide forward guidance on the Fed's next interest-rate decision, saying policymakers would debate incoming data at their meeting in four weeks and that the Fed's priority is to "get policy right."
- Warsh argued that the AI investment boom is currently showing up on the economy's demand side but could expand its supply side, with "huge implications for monetary policy" if productive capacity grows.
- Warsh drew a contrast with past cycles, saying businesses are now investing because they expect AI to boost productive capacity rather than relying on "financial engineering" such as share buybacks.
- European Central Bank President Christine Lagarde said she regretted feeling "bound and compelled" by forward guidance and instead favors "framework guidance," where the ECB explains how it reaches decisions without signaling a predetermined rate path.
- Bank of England Governor Andrew Bailey and Bank of Canada Governor Tiff Macklem joined Warsh and Lagarde on the panel, broadly agreeing that central banks should move away from explicit forward guidance on interest-rate decisions.
Why it matters: A sitting Fed Chair publicly declaring that "inflation risks have come down" at a major global forum is a notable dovish tilt, enough to lift Bitcoin 2% back through the $60,000 mark. Bitcoin traders now have roughly four weeks until the next Fed meeting to price in whether Warsh's data-dependent stance opens the door to a cut, while equity desks (per WSJ's Nasdaq coverage) read his refusal to preview July as a dodge that keeps uncertainty elevated.
