Fed Chair Kevin Warsh faces inflation hawks in first rate meeting, putting crypto rate-cut hopes on ice - Cryptopolitan

Crypto Insight Summary: * Fed Chair Kevin Warsh starts his first policy meeting with rates expected to stay at 3.5%–3.75%. * Inflation at 4.2% has weakened hopes for rate cuts and raised the risk of a more hawkish Fed message. * That is negative for crypto because Bitcoin depends heavily on liquidity, ETF inflows, and lower real-rate expectations. **The US Federal Reserve begins its two-day policy meeting this week under its new chair, Kevin Warsh, with interest rates widely expected to remain at 3.5% to 3.75%.** The bigger question for markets is no longer when rate cuts will arrive, but whether inflation will force the Fed to stay tighter for longer. That shift matters for crypto traders, who had been expecting easier monetary policy to support risk assets. Warsh, who succeeded Jerome Powell last month, begins his tenure with inflation still running well above the Fed’s 2% target. The Consumer Price Index rose 4.2% year over year in May, its fastest pace in roughly three years, partly driven by higher energy costs linked to geopolitical tensions, according to CBS News. That inflation backdrop has changed the tone around the Fed’s next move. Instead of pricing in a clear path toward cuts, traders are now weighing whether persistent inflation could keep rates elevated or even revive discussion of hikes. The Fed is expected to leave rates unchanged at the end of its meeting on Wednesday. Crypto Insight Analysis: Direction: Bearish BTC / Bearish ETH Impact: Major Impact Horizon: Short-term (1-3 days) Reasoning: Fed's hawkish stance and higher inflation reduce rate cut expectations, hurting crypto liquidity and sentiment.