Interest Rates

Peter Schiff Says The Asset Everyone Calls Safe Is Down 50%, What Does Bitcoin Do Now?

Bitcoin Bitcoin, Bond Market, Interest Rates, Peter Schiff, Risk Assets, TLT ETF, Treasury Bonds

BitcoinAugust 14, 2026·5 min read

Long-dated US Treasury bonds have fallen 54% from their 2020 peak, with inflation-adjusted losses exceeding 65%, a collapse that forces institutional investors to reassess whether government debt remains a safe haven or merely a crowded trade. The deterioration of “risk-free” returns now reshapes the competitive calculus for alternative assets, including Bitcoin, which offers no yield but unlimited upside optionality.

The iShares 20+ Year Treasury Bond ETF (TLT) fell to $81.89 on Friday, a 54% decline from its March 2020 peak of $179.70.
The US Treasury sold $25 billion of 30-year debt at 5.216% on Thursday, the highest yield since February 2001, when the government expected to retire the national debt entirely.
With TLT now yielding 5.17% over 30 days, the opportunity cost of holding Bitcoin at zero yield has narrowed, reshaping relative value for institutional portfolios.

54% Decline in long-dated Treasury ETF from March 2020 peak to Friday’s low
5.216% Yield on 30-year Treasury auction, highest since February 2001 issuance
65% Real purchasing-power loss after adjusting for 29% cumulative inflation since 2020

The asset class widely regarded as the safest in global markets has entered uncharted territory. The iShares 20+ Year Treasury Bond ETF, which holds US government debt maturing beyond two decades and carries zero default risk, has lost more than half its nominal value in less than four years.

On Friday, TLT closed at $81.89, marking a fresh 52-week low and crystallizing losses that began at a peak of $179.70 in March 2020. The decline from that apex represents a 54% erasure of investor capital, a scale of loss typically associated with risk assets, not the bedrock of institutional portfolios.

The damage to purchasing power runs far deeper than the nominal figure suggests.

Since March 2020, consumer prices have risen 29% according to Bureau of Labor Statistics data.

An investor who bought TLT at its pandemic peak and held through Friday’s close has experienced a cumulative real loss, accounting for inflation, of approximately 65%. That transformation exposes a central institutional risk: duration-heavy bonds offered the appearance of safety precisely when inflation was accelerating fastest, creating a value trap disguised as a flight-to-quality trade.

Long-term holders did not avoid risk; they concentrated it in the single worst direction.

30-Year Treasury Yield Reaches Highest Level Since Pre-Debt-Retirement Era

The proximate trigger for Friday’s decline was the Treasury’s sale of $25 billion in 30-year bonds at a 5.216% yield. That coupon rate represents the second-highest on record for an issuance of that maturity. The only higher yield came in February 2001, at 5.46%, a historical moment laden with irony.

In 2001, after years of federal budget surpluses under the Clinton administration, Treasury officials operated under the assumption that the national debt would be retired within a decade. The government ceased issuing 30-year bonds entirely, viewing them as unnecessary ballast for a fiscally strengthening nation.

The 30-year bond returned to auction in 2006, once budget surpluses had evaporated and deficits had resumed their structural climb. For nearly two decades, yields on the 30-year maturity remained substantially lower than Friday’s level.

The current 5.216% issuance represents the highest cost of borrowing at that maturity since the year Washington operated under the premise that long-term debt would soon be obsolete. The irony cuts deeper: the government now borrows at rates unseen in 25 years, not because debt is being paid down, but because deficits have widened and inflation expectations have shifted.

The auction itself was not underfunded, bids covered the offering 2.39 times, in line with recent sale patterns, but adequate coverage masked weak price action. Demand for supply was present, but the yield required to clear that supply signaled that Treasury debt has moved from scarcity premium to commodity pricing.

Institutional buyers would absorb the $25 billion only at rates that now made holding legacy long-duration portfolios acutely painful on a mark-to-market basis.

Duration Risk Concentrated 54% of Portfolio Value Into Interest-Rate Exposure

The severity of TLT’s losses reflects a structural characteristic of the fund: extreme duration sensitivity. According to iShares prospectus data, TLT carries an effective duration of 14.9 years. In practical terms, a one percentage point rise in yields triggers approximately a 15% decline in the fund’s net asset value.

Since March 2020, yields on long-dated Treasuries have moved upward by approximately 4 percentage points (from roughly 1.2% to 5.2%), creating the mechanical conditions for a 60% loss before accounting for monthly dividend reinvestment and compounding effects.

This concentration of risk in duration means that TLT has underperformed even standard Treasury indices and bond ETFs with shorter maturities. A generalist institutional investor seeking government bond exposure could have elected shorter-duration alternatives, such as funds tracking intermediate-term Treasury debt, and preserved significantly more capital.

The decision to hold or concentrate in the longest-dated maturity was not a decision to hold safe assets; it was a directional bet on falling interest rates. When rates rose instead, the “safe” portion of a balanced portfolio became the single largest source of losses.

The yield curve inversion that characterized much of 2022 and 2023 had created the illusion of exceptional value in long bonds.

Investors conditioned by decades of falling rates and quantitative easing moved capital into the highest-duration instruments at precisely the wrong moment in the rate cycle. The pandemic era’s monetary expansion and fiscal stimulus had created an environment where nominal yields bore no relationship to inflation expectations or real rates.

Long-duration Treasuries appeared cheap on a historical yield basis, but that cheapness was in fact a warning signal of future price depreciation, not an opportunity.

Competing Yields Now Eliminate Bond Market’s Yield Advantage Over Bitcoin

The Treasury market’s structural shift has redrawn the opportunity-cost calculus between traditional safe assets and alternative stores of value. A 5.17% yield on a 30-day Treasury instrument is materially different from the 0.5% to 1.5% yields available on long-dated bonds two years ago.

At current rates, a Treasury position offers real compensation, perhaps 2% to 3% in real terms after inflation, depending on future price trends. That compensation is no longer trivial relative to the optionality of holding an asset like Bitcoin, which generates no yield whatsoever but offers unlimited upside if its scarcity narrative and adoption rate accelerate.

For institutional investors constructing long-duration portfolios, this narrowing of the yield gap removes one of the primary historical arguments against Bitcoin allocation. A balanced institutional fund might previously have justified zero or minimal Bitcoin exposure by arguing that Treasury yields already provided adequate real returns with lower volatility.

That argument was always backward-looking, it assumed rates would remain historically depressed. With 30-year yields now at 25-year highs and real yields solidly positive, the opportunity cost of avoiding alternative assets has shrunk.

Bitcoin traded near $62,968 on Friday, down 3.2% in 24 hours, a typical intraday movement for the asset class. The volatility in Bitcoin far exceeds that of Treasuries on any given day, but the directional trend has favored Bitcoin materially over the past four years. An investor who held $1 million in TLT since March 2020 has seen it decline to roughly $460,000 in nominal terms.

An investor in Bitcoin at the same period has seen capital fluctuate widely but ultimately retain or expand purchasing power relative to TLT. The track records are now sufficiently visible that institutional due diligence processes cannot ignore the comparison.

Fed Policy Normalization Creates Structural Headwinds for Long-Duration Bond Valuations

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Bitcoin Volatility Returns After Fed Holds Interest Rates Steady

Bitcoin, Equities Bitcoin, Cryptocurrency Markets, Federal Reserve, FOMC Meeting, Interest Rates, Kevin Warsh, Monetary Policy

BitcoinJuly 29, 2026·5 min read

The Federal Reserve’s decision to hold interest rates steady at 3.50-3.75% amid unusual pre-meeting uncertainty has reignited bitcoin volatility, with the asset swinging $3,000 in 24 hours. Institutional investors face a critical signal point in incoming Fed Chair Kevin Warsh’s first press conference, which could clarify the central bank’s forward guidance and reset expectations for crypto risk assets.

Fed voted 9-3 to maintain rates at 3.50%-3.75%, with futures markets pricing 30%-38% probability of a hike beforehand
Bitcoin fell $3,000 in de-risking ahead of the meeting, then rebounded to $64,500 before dipping below $63,800
New Fed Chair Kevin Warsh’s imminent press conference is positioned as the key determinant of next policy direction and crypto volatility

9-3 Fed vote to hold rates, breaking 99% pre-meeting consensus pattern since pandemic
30%-38% Probability of rate hike priced into futures and prediction markets before decision
$3,000 Bitcoin decline in 24 hours prior to Fed announcement and statement release

The Federal Reserve’s July meeting concluded with a 9-3 vote to maintain the federal funds rate target in the 3.50%-3.75% range, a decision that carried outsized significance for cryptocurrency markets already whipsawed by monetary policy uncertainty.

The central bank’s statement confirmed the committee would continue its policy of maintaining ample reserves in the banking system, supporting the Fed’s dual mandate of price stability and maximum employment.

Yet the path to this decision proved far messier than the post-pandemic norm: futures markets and prediction platforms had assigned a 30%-38% probability to a rate hike in the days before the meeting, marking a stark departure from the 99% pre-meeting consensus that had characterized every FOMC decision since March 2020.

For institutional crypto investors, the divergence matters because it signals either genuine dissent within the Fed’s leadership or genuine uncertainty about the inflation trajectory ahead. Bitcoin, the most volatility-sensitive asset class to real interest rate expectations, reflected this uncertainty viscerally.

In the 24 hours preceding the announcement, the asset shed $3,000 as large holders de-risked into cash and stablecoins ahead of a meeting outcome that appeared far from settled. This kind of pre-event liquidation typically signals that leveraged positions and passive indexers were unwinding hedges, a sign that institutional flow managers had priced in material downside risk.

Pre-Meeting Consensus Breakdown Signals Rare Fed Divisions

The 9-3 vote split marked the first significant public division on the Fed’s policy committee since the onset of the COVID-19 pandemic, when interest rate decisions had become nearly automatic.

From March 2020 through this July meeting, FOMC outcomes carried 99% agreement in the media’s pre-meeting prediction markets, a reflection of telegraphed policy and the central bank’s forward guidance framework.

The emergence of three dissenting votes, even on a hold decision, suggests either that inflation concerns remain elevated among some governors or that the path to future rate cuts is more contested than Chair Warsh’s predecessor had indicated.

This breakdown carries direct implications for crypto asset pricing. Bitcoin and other risk assets trade on real interest rate expectations, not nominal rates alone. A 9-3 split on a hold, even without a rate change, implies that future policy direction remains uncertain.

Some Fed governors appear hawkish enough to have voted for a hike; others may have wanted guidance signaling faster rate cuts ahead. This lack of clarity freezes institutional capital allocation, because portfolio managers cannot confidently price the probability of the next move or the timeline for any pivot toward easing.

The last time Fed voting produced this kind of visible dissent was in the early taper discussions of 2013, which preceded a sharp sell-off in risk assets.

Bitcoin’s $3,000 Pre-Announcement Liquidation Reflects Leveraged De-Risking

Bitcoin’s retreat from $64,500 to below $63,800 in the hours immediately before the Fed statement was not a gradual drift but an active liquidation. The $3,000 decline in a single 24-hour window prior to the meeting conclusion indicates that leveraged traders and passive index positions had been pared back by institutional risk managers operating under pre-determined volatility bands.

When a single asset class moves that sharply on anticipated binary event risk, it typically reflects forced selling from stop-loss orders and margin calls rather than fundamental repricing.

What followed the announcement was the expected volatility rebound: bitcoin pumped above $64,000 immediately after the hold decision was released, then fell again as traders awaited Warsh’s press conference remarks.

This pattern, sharp pre-event liquidation followed by relief-driven rebound followed by fresh uncertainty, is characteristic of institutional positioning ahead of central bank communication. Portfolio managers had likely set upper and lower bands for bitcoin holdings in anticipation of either outcome, with instructions to buy on a dovish hold and sell on a hawkish hold.

The magnitude of the move is notable in another sense: a $3,000 swing represents roughly 4.6% of bitcoin’s then-prevailing price, which is material but not catastrophic for an asset class that routinely experiences 10%-15% daily swings during genuine crisis events. This suggests that the de-risking was targeted and disciplined rather than panicked, consistent with institutional behavior.

Warsh’s First Press Conference as the Critical Next Signal

The July FOMC meeting culminated in a hold decision, but the real market-moving event has yet to occur: Fed Chair Kevin Warsh’s inaugural press conference in the role. Warsh, a former Goldman Sachs executive and Fed governor during the 2008 financial crisis and its aftermath, has signaled in past remarks that he favors data-driven policy and measured communication.

His first public statement as Chair will be scrutinized for any indication of whether the Fed plans to cut rates at the next meeting, hold for an extended period, or pivot back to tightening if inflation accelerates.

For cryptocurrency markets, the stakes are high because Warsh’s tone will either validate or invalidate the post-hold rebound. If he signals that rate cuts are likely within the next two to three meetings, bitcoin and other risk assets will likely consolidate gains and potentially push higher, as real interest rates would be expected to decline.

If he suggests the Fed will hold steady or hints at future hikes, the volatility that emerged after the announcement will likely intensify, with fresh liquidation possible.

Institutional investors in crypto are effectively trading Warsh’s communication style as much as the Fed’s policy stance itself.

The fact that futures markets had priced a 30%-38% probability of a hike ahead of the decision suggests that some significant expectations revision is possible if Warsh explicitly rules out tightening. A clear dovish signal, such as a statement that rate cuts are being seriously considered for later this year, would likely produce a sharp rally across risk assets.

Conversely, any language hinting at the three dissenting governors’ inflation concerns could trigger another round of de-risking similar to what occurred in the 24 hours before the announcement.

Institutional traders should monitor Warsh’s first press conference remarks for explicit guidance on the Fed’s rate path through year-end and any commentary on inflation trends that might explain the 9-3 vote split. A clear forward-looking statement on the next FOMC meeting’s likely outcome will be the key determinant of whether bitcoin settles into a new trading range or experiences fresh volatility. The lack of consensus on the Fed’s direction means that each official communication from Warsh will reset market expectations with outsized impact.

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Bitcoin and Gold Jump After Fed Rate Hold Splits FOMC 9 to 3

Bitcoin Bitcoin, Federal Reserve, FOMC, Gold, Interest Rates, Kevin Warsh, Monetary Policy

BitcoinJuly 29, 2026·6 min read

The Federal Reserve’s rare 9-3 split vote to hold rates steady signals deepening internal disagreement on monetary policy, pushing down hike odds and triggering immediate rallies in both Bitcoin and gold. For institutional investors, the dissent from three regional Fed presidents, combined with a dovish market repricing, reduces near-term rate risk and reshapes portfolio hedging assumptions for the remainder of 2026.

Federal Reserve voted 9-3 to hold rates at 3.50%-3.75%, with Cleveland, Minneapolis, and Dallas presidents dissenting for a 25-basis-point hike
Bitcoin rallied 1.1% to $64,325 in 24 hours; gold rose from $4,000 to above $4,084 within minutes of the announcement
CME FedWatch hike odds for September fell below full pricing after the vote, reducing the probability markets had assigned to further near-term tightening

9-3 FOMC vote margin on rate hold, largest dissent under Chair Kevin Warsh
$64,325 Bitcoin price after announcement, up 1.1% versus prior 24-hour close
30% CME FedWatch hike probability one day before announcement, now priced lower

The Federal Open Market Committee kept the federal funds target range unchanged at 3.50% to 3.75% on Wednesday, but the decision came wrapped in an unusually public disagreement. Three regional Federal Reserve presidents, Beth Hammack of Cleveland, Neel Kashkari of Minneapolis, and Lorie Logan of Dallas, dissented, each preferring an immediate quarter-point increase.

The 9-3 split marks the most contested outcome since Kevin Warsh assumed the chair in May and represents the kind of internal divide that traders and asset managers have been watching for signals about the Fed’s true stance on inflation and growth.

The immediate market reaction was sharp and revealing. Bitcoin climbed from approximately $63,700 to an intraday peak near $64,700 within fifteen minutes of the decision, ultimately settling near $64,325 with a market capitalization of $1.29 trillion. Gold moved in tandem, rising from roughly $4,000 to above $4,084 before retracing to $4,076.

The synchronized gains in both assets reflected a single underlying trade: the sudden collapse of near-term rate hike expectations that had been baked into financial markets just hours before.

Three Regional Presidents Challenge Warsh’s Hold Consensus for First Time

The three dissenters all lead regional Reserve Banks rather than sitting on the Board of Governors in Washington, a distinction that matters for institutional reading of Fed politics. No governor broke ranks with Warsh on the hold decision, meaning the division occurred outside the Fed’s formal center of power.

This structure limits the immediate policy impact of the dissent but signals that at least one third of regional leadership believes current inflation pressures warrant tighter monetary conditions than the consensus permits.

Warsh’s first FOMC meeting in June produced a unanimous hold, making Wednesday’s 9-3 split a sharp reversal. Market analysts had flagged dissent as a real possibility heading into July, given persistent inflation readings and the hawkish rhetoric from several regional presidents over the prior weeks.

The fact that exactly three officials broke ranks, enough to count as significant but not enough to splinter the Committee further, suggests the Fed remains broadly aligned on a hold for now, even as internal pressure for tightening persists.

The policy statement itself offered little new guidance. Policymakers reiterated that economic activity is expanding solidly despite Middle East geopolitical uncertainty, and they emphasized continued strength in productivity growth and capital investment. Inflation, however, remains above the 2% target, a point the Committee attributed to supply shocks in specific sectors including energy.

The language around price stability was unchanged from June, offering no hints about the timing or sequence of potential future moves.

Traders Had Priced July Hike at 30% Despite Fed’s Consistent Hold Messaging

The market’s pre-announcement positioning reveals why the hold triggered such a swift asset rally. CME FedWatch data showed hike odds hovering near 30% just one day before the July 29 decision, while prediction market Kalshi estimated roughly 23% odds on Wednesday morning.

These probabilities were elevated enough to keep yields elevated globally, with bond markets pricing near their highest levels since 2008. The persistence of hike odds despite the Fed’s patient messaging suggested traders were hedging against a surprise move or testing whether regional dissent could overcome consensus.

Bank of America noted pre-announcement that a July increase would mark an unprecedented move for the Fed. The bank’s analysis pointed out that the central bank has not raised rates since 1994 with less than 60% market probability priced in beforehand, underscoring how unusual it would have been for the Committee to hike on Wednesday.

The fact that hike odds remained in the 23-30% range anyway reveals how much uncertainty hangs over monetary policy, even as the Fed’s own communications lean dovish.

The immediate aftermath saw interest rate swaps reprice sharply, with markets no longer fully pricing in a September hike.

Bitcoin and Gold Surge as September Rate Path Shifts Lower

The repricing of rate expectations proved the engine behind the cryptoasset rally. Bitcoin’s 1.1% gain to $64,325 over 24 hours arrived entirely in the minutes surrounding the announcement, not spread across a broader trading session. The same pattern held in gold, which moved from $4,000 to a high above $4,084 in the quarter hour after the Fed’s statement.

Both assets benefit from lower nominal rates and reduced real rate expectations, making them natural hedges against monetary easing or a halt to tightening.

For institutional investors, the chart pattern matters as much as the price level. Cryptocurrency and gold have historically moved together during periods of Fed pivot or policy uncertainty, and Wednesday’s synchronized gains reinforce that correlation.

An investor holding either asset as an inflation hedge or rate-sensitive portfolio offset saw both positions rewarded simultaneously, validating the hedge thesis at a moment when it mattered most to portfolio performance.

The broader rate market signaled the shift plainly. Futures and swap markets pulled back from fully pricing a September increase, a move that eases pressure on bond yields that had climbed sharply in prior weeks.

Oil markets, which remain a key swing factor for both inflation expectations and Fed reaction function, fell sharply after Washington paused strikes on Iran, though tension resurfaced later in the session. The lack of a decisive oil decline meant the Fed’s inflation-fighting credibility remained untested in Wednesday’s aftermath.

Dissent Signals Genuine Split on Inflation Versus Growth Trade-Offs

The 9-3 margin raises a tactical question for institutional positioning: whether the three dissenters represent an isolated bloc or the leading edge of a broader hawkish shift. Hammack, Kashkari, and Logan have each signaled concern about persistent inflation in recent weeks, and their dissent suggests they view current rate levels as too loose relative to price stability risks.

Each runs a regional bank with distinct economic conditions, meaning their votes likely reflect genuine regional data divergence rather than a unified opposition to Warsh’s leadership.

No Board of Governors member dissented, a fact that limits the political weight behind the hawkish challenge.

The dissent also matters because it shows that the Fed remains genuinely divided on how much slack remains in the economy and labor market. Warsh and the consensus nine believe current rates are appropriate and that further data should guide any future moves.

The three dissenters evidently believe inflation pressures, despite some moderation, warrant proactive tightening now rather than data dependence later. This divide will resurface at every meeting until either inflation clearly declines or the dissenters’ regional data weakens enough to align them with the hold consensus.

What Institutional Investors Watch Until the September Meeting

The next FOMC decision arrives in September, and the market’s shift away from full hike pricing creates a concrete deadline for tracking Fed intentions. Between now and then, economic data on employment, inflation, and growth will either validate Warsh’s patience or vindicate the three dissenters. A strong inflation read or

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Why a resilient jobs market keeps turning into a Bitcoin sell signal

Bitcoin, Equities Bitcoin, Cryptocurrency Trading, Federal Reserve, Interest Rates, Jobless Claims, Labor Market, Liquidity

BitcoinJune 20, 2026·6 min read

A strengthening U.S. labor market is now the primary headwind pushing Bitcoin lower, as resilient employment data convinces markets that the Federal Reserve will maintain elevated interest rates far longer than crypto investors had priced in. For institutional investors, this dynamic inverts the traditional safe-haven narrative: economic strength has become a liquidity drain on digital assets.

Initial jobless claims fell to 226,000 for the week ending June 13, remaining in historically low ranges and signaling minimal corporate layoffs.
The unemployment rate held steady at 4.3% for a third consecutive month, with continuing claims rising 24,000 to 1.81 million, the highest level in nearly three months.
Bitcoin fell below $64,000 following the jobs report, a 3% daily decline, as markets repriced expectations for Fed rate cuts further into the future.

226,000 Initial jobless claims signal employers restraint in firing despite economic uncertainty
4.3% Unemployment rate unchanged for three straight months showing labor market resilience
3% Bitcoin’s single-day decline immediately after jobs data release versus intraday high

Bitcoin’s sharp pullback following strong June employment data exposed a critical relationship that has come to dominate crypto markets: the cryptocurrency now trades primarily on expectations of central bank liquidity rather than on the underlying health of the real economy.

When the Labor Department reported that initial jobless claims fell by 4,000 to 226,000 and that the unemployment rate remained flat at 4.3% for a third straight month, Bitcoin did not react as a beneficiary of economic stability. Instead, it slid from an intraday high of $66,315 to below $64,000 within hours, falling nearly 3% as traders processed the implications.

The reaction was not irrational, it reflected a market consensus that has crystallized over the past two years: stronger employment data means the Federal Reserve has less urgency to cut interest rates, which means liquidity will remain constrained, which means speculative assets like Bitcoin face sustained headwinds.

Fed Holds Rates While Labor Market Softens Barely at the Edges

The composite picture from the June employment data was one of a labor market that remains fundamentally healthy but showing early signs of fatigue. Continuing claims, a measure of laid-off workers still collecting benefits, rose by 24,000 to approximately 1.81 million, marking the highest level in nearly three months.

The average duration of unemployment extended to 11.6 weeks, the longest stretch since late 2021. May payroll growth added 172,000 jobs, keeping the three-month average near 188,000. None of these figures suggested imminent collapse, but together they painted a picture of slowing momentum rather than accelerating growth.

The Federal Reserve’s response arrived one day later and reinforced Bitcoin’s sell signal. At its June 17 meeting, the FOMC held its benchmark rate steady at 3.50% to 3.75%, exactly as markets had expected.

What caught investors off guard was the hawkish guidance embedded in the committee’s rate projections. The median dot for the end of 2026 climbed to 3.8% from 3.4% in March, a significant upward revision that signaled the Fed’s base case had shifted toward a longer period of elevated rates.

That shift meant markets would need to reprice their expectations for rate cuts, and that repricing hit risk assets immediately. In crypto markets, where leverage and duration-sensitive positioning dominate, the impact was swift and unambiguous.

Labor Data Now Drives Bitcoin Price More Than Economic Growth Itself

The mechanism linking jobs reports to Bitcoin prices has become increasingly mechanical and predictable, driven by a single transmission mechanism: expectations about the Fed’s policy path.

Bitcoin’s sensitivity to employment data does not stem from the numbers themselves, they do not determine whether businesses will accept or reject Bitcoin payments, nor do they affect the network’s technical capabilities.

Rather, they feed directly into market estimates of what the Federal Reserve will do next, and those estimates determine real yields, currency valuations, and appetite for speculative risk.

Strong labor data works through four distinct channels. First, it lowers the perceived probability of near-term rate cuts, keeping real yields elevated, the yield on inflation-adjusted bonds that compete directly with zero-coupon assets like Bitcoin. Second, it supports the dollar by signaling economic resilience and reducing the case for monetary easing.

Third, it extends the timeline over which the Fed is expected to maintain restrictive conditions, increasing the duration risk embedded in longer-dated speculative positions. Fourth, it reduces the appetite for speculative and longer-duration risk assets, which includes the entire cryptocurrency complex.

Each of these effects punishes Bitcoin simultaneously, creating the kind of sharp, coordinated selloff that occurred on the June 13 claim date.

The Fed itself parses labor data in granular fashion, extracting different signals from each component. Initial jobless claims, which fell to 226,000, indicate whether companies are actively firing; at this level, they suggest most employers are holding onto their workforce despite economic uncertainty.

Continuing claims show whether laid-off workers find new jobs and re-enter the workforce; the 24,000 rise suggested that rehiring momentum may be stalling. Payroll growth establishes the net expansion or contraction of employment across the economy; the 172,000 monthly pace is solid but no longer the 200,000-plus clip that would signal robust demand.

The unemployment rate captures slack in the system; at 4.3% unchanged, it signals that labor is becoming neither tighter nor looser.

Bitcoin’s Two-Year Trade on Rate Expectations Now Dominates Price Discovery

For two years, Bitcoin has behaved primarily as a liquidity-sensitive instrument, responding to expectations about the future path of interest rates far more than to whether an economic print sounds encouraging in absolute terms.

This marks a substantial shift from Bitcoin’s earlier narrative as a hedge against inflation or a store of value independent of monetary conditions. When the Fed was hiking rates aggressively from 2022 through mid-2023, Bitcoin was battered, falling from $69,000 to below $17,000. As speculation grew that rate hikes would soon end, Bitcoin recovered sharply, trading above $65,000 by early 2024.

The current volatility around employment data reflects the same dynamic: any report that extends the Fed’s holding pattern beyond what markets had expected becomes a selling signal for crypto.

The June 13 jobs report was solid enough to validate the Fed’s cautious stance. Continuing claims rising to their highest level in three months might have been parsed as a warning sign in isolation, but the data came within the context of still-low initial claims and steady unemployment.

The Fed could plausibly argue that it had no need to rush to cut rates in response to a labor market that remained resilient, even if not accelerating. That interpretation aligned perfectly with the June 17 projections, which penciled in rates staying higher for longer. Bitcoin’s price action reflected traders quickly repricing that reality into the asset’s valuation.

Wage Growth and Inflation Remain the Final Arbiters of Fed Timing

While jobless claims and unemployment rates dominate headlines, the Fed’s actual decision on rate cuts will ultimately hinge on wage growth and inflation persistence. If nominal wage growth continues to outpace productivity gains, the central bank faces a dilemma: cut rates to ease financial conditions and risk rekindling inflation, or hold steady and accept continued pressure on growth.

So far, wages have remained resilient without accelerating sharply, giving the Fed room to remain patient.

This wage dynamic is critical for Bitcoin investors because it determines whether the Fed can eventually ease without appearing to surrender on inflation.

If inflation proves sticky and wage growth remains elevated, the Fed may need to keep rates higher for even longer than current projections suggest. Conversely, if wage growth flattens and inflation falls more sharply, the Fed may be forced to cut despite whatever labor market data arrives.

Bitcoin traders are therefore watching for the first sign that wage pressure is moderating or that inflation is rolling over more decisively. Until that signal arrives, each new employment report confirming a strong labor market will continue to reprice rate-cut expectations downward, extending the duration of the Fed’s restrictive stance and extending the headwinds facing crypto.

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Kevin Warsh Sends Bitcoin and Gold Lower in First FOMC Press Conference: What Did He Say?

Bitcoin Bitcoin, Federal Reserve, FOMC, Gold, Interest Rates, Kevin Warsh, Monetary Policy

BitcoinJune 17, 2026·6 min read

Federal Reserve Chair Kevin Warsh delivered his inaugural press conference on June 17, 2026, with a hawkish message on inflation and zero forward guidance, sending both Bitcoin and gold prices sharply lower. The move signals a tougher policy stance on price stability that could reshape institutional crypto positioning in a higher-for-longer rate environment.

Warsh held the federal funds rate steady at 3.50%, 3.75%, but nine FOMC officials project at least one rate hike in 2026
The Fed eliminated forward guidance entirely, citing that it was “not well suited to the current policy conjuncture”
Warsh reaffirmed the 2% inflation target as non-negotiable, stating inflation has run above target for over five years

5 new Fed task forces launched to review communications, balance sheet, data, productivity, and inflation frameworks
2% inflation target reaffirmed as immovable policy anchor despite five years above target
3.50%, 3.75% federal funds rate held steady at first Warsh FOMC meeting

Kevin Warsh’s debut as Federal Reserve chair on Wednesday struck a notably different tone from his predecessors, removing the traditional scaffolding of forward guidance that markets have relied on for steering expectations.

The FOMC voted unanimously to maintain the federal funds rate in the 3.50%, 3.75% range, but Warsh’s accompanying remarks and Q&A session reframed the Fed’s communication strategy in ways that caught institutional investors off guard.

Bitcoin and gold both sold off sharply as traders absorbed the implications: a Fed chair less willing to telegraph its moves, more willing to hold policy steady until inflation decisively retreats, and committed to a 2% target that he described as immovable regardless of how long the current overshoot persists.

Warsh Kills Forward Guidance, Forcing Markets to Navigate Policy Fog

The single most striking policy shift in Warsh’s debut was the elimination of forward guidance, a tool the Fed has used for over a decade to anchor rate expectations and reduce market volatility.

In his opening remarks, Warsh said the committee had “refrained from offering projections of my own” and that forward guidance was simply “not well suited to the current policy conjuncture.” The new, shorter policy statement, stripped of what Warsh called “older language”, signals a deliberate move away from signaling, a posture that leaves traders and portfolio managers with far less visibility into the Fed’s next moves than they had under previous leadership.

This represents a material break from standard central bank practice and will force institutional crypto markets to reprice risk without the usual breadcrumbs markets have come to expect. Futures traders who had bet on rate guidance or dot plot signals now face a Fed that will simply act without pre-announcement.

For crypto-native assets and digital-asset-linked derivatives, the removal of forward guidance eliminates one of the few reliable macro anchors that has previously allowed for orderly repricing of long-duration risk assets. Bitcoin and other cryptoassets, which are highly sensitive to changes in real rates and nominal risk appetite, immediately reflected the uncertainty with sharp downside moves.

I see no reason until we have reestablished our commitment and ability to deliver on the 2% inflation objective to revisit that.

Kevin Warsh, Federal Reserve Chair

Warsh made clear that the 2% target is a line that will not move.

Median Projections Show Nine Officials Expect At Least One 2026 Rate Hike

Beneath the surface of the held rate decision lay a critical data point: nine FOMC officials submitted projections indicating at least one additional rate hike within 2026.

The median path across the committee’s summary of economic projections, or SEP, shifted slightly higher than prior expectations, suggesting that a significant bloc of the committee views current inflation as stubborn enough to warrant additional tightening before any pivot toward cuts.

While Warsh himself declined to submit his own dot plot projections, a calculated move to avoid anchoring markets to his personal rate forecast, the collective signal from the committee was unambiguous: this is not a committee prepared to cut rates soon.

For institutional investors managing crypto and other risk assets, the nine-hike signal compounds the pressure from higher-for-longer rate expectations.

The crypto market has historically performed best during periods of monetary accommodation or when rate cuts appear imminent; a scenario in which rate hikes remain on the table into the second half of 2026 argues for extended pressure on leveraged longs and elevated volatility in derivative markets.

The shift also contradicts the post-May rally that had priced in a more dovish Fed; Warsh’s first appearance reversed that positioning decisively.

Five New Task Forces Signal Deeper Policy Rethink and Potential Long-Term Constraints

Beyond the immediate rate decision, Warsh announced the creation of five new FOMC task forces to examine communications strategy, the Fed’s balance sheet management, data sources and availability, the nexus of productivity, employment and artificial intelligence, and inflation measurement frameworks.

The decision to launch this broad review signals that Warsh intends to reshape the Fed’s operational approach more fundamentally than a single press conference can convey.

Each task force will be charged with examining “current practice” and considering alternatives, language suggesting a willingness to revisit long-held assumptions about how the Fed communicates, manages liquidity, and defines its mandate.

The inflation framework task force carries particular weight for crypto markets. If the Fed reconceptualizes how it measures inflation or re-examines what “price stability” means, the outcome could affect the durability of the 2% target itself or the severity with which the Fed pursues it.

Warsh’s insistence that the 2% target is “the left of the decimal point” and that inflation must return to that level before the committee revisits its framework suggests that near-term relief from tight policy is unlikely.

For institutional crypto positions, the implication is that any relief rally based on expected Fed pivot or target revision should be viewed with skepticism; the new leadership has made clear it intends to hold the line on price stability as the overriding objective.

Bitcoin and Gold Tumble as Markets Price Hawkish Tone and Policy Uncertainty

The immediate market reaction, sharp losses in Bitcoin, gold, and other risk assets, reflected investors repricing for a materially tighter policy regime than had been expected.

Gold, traditionally a hedge against inflation and monetary debasement, fell as the Fed signaled an unflinching commitment to bringing inflation down to 2%. Bitcoin, which has sometimes moved inversely to real rates and exhibited sensitivity to monetary surprise, sold off as markets absorbed both the prospect of higher rates and the added uncertainty of a Fed chair unwilling to provide forward guidance.

The price action underscores a critical dynamic for institutional crypto portfolios: without forward guidance, markets will be forced to reprice more frequently on actual economic data and Fed communications, potentially triggering larger intra-session swings.

Warsh’s emphasis on the Fed’s commitment to price stability, repeated multiple times across his remarks, signals that disinflation will take priority over financial conditions or asset price support. This posture favors short-duration risk assets and near-term bonds over long-duration assets like crypto, which benefit from lower real rates and expectations of future accommodation.

Shortened Policy Statement and Refusal to Offer Personal Projections Redefine Fed Transparency

Warsh explicitly stated that the committee’s new policy statement was “a bit shorter, a bit simpler, and dispenses with some older language” while offering only “the facts, as best we can judge it.” This rhetorical framing, that brevity and clarity supersede detailed signaling, marks a philosophical break from recent Fed practice.

By refusing to submit his own dot plot projection, Warsh also avoided the trap of appearing to telegraph a specific rate path, a move that some observers viewed as prudent but others interpreted as deliberate obfuscation designed to maximize the Fed’s optionality.

For crypto market structure and derivatives pricing, the shift toward less guidance introduces a new risk regime. Options markets, futures curves, and leveraged positions all rely on anchored expectations to function smoothly; without forward guidance, the implied volatility term structure will likely remain elevated and subject to sharper repricing

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BTC Price Drops as New Fed Chair Kevin Warsh Holds Rates Steady

Bitcoin Bitcoin, BTC Price, Federal Reserve, FOMC, Interest Rates, Kevin Warsh, Monetary Policy

BitcoinJune 17, 2026·5 min read

Federal Reserve Chair Kevin Warsh held benchmark interest rates steady at 3.5%, 3.75% in his first FOMC meeting, defying market expectations for a hawkish stance and triggering mixed signals for bitcoin traders weighing policy direction against near-term correction risks. Institutional investors face renewed uncertainty about the Fed’s inflation-fighting commitment under Warsh’s leadership, with conflicting analyst views complicating medium-term asset allocation decisions.

Warsh held rates unchanged at 3.5%, 3.75%, matching Powell’s third consecutive hold two months prior
Bank of America survey: 55% of fund managers expected hawkish Warsh; economist Juneau predicted dovish stance instead
Bitcoin fell over $1,000 in minutes after rate decision, signaling trader concerns about policy pivot or correction

3.5%, 3.75% Federal Reserve benchmark rate held steady under new Chair Warsh
55% of BofA fund managers anticipated hawkish Warsh press conference guidance
$66,400 Bitcoin peak before rate announcement, down from intraday high

Kevin Warsh’s first Federal Reserve policy decision as chair produced the market outcome most traders had hedged against: no rate change, no hawkish signals, and no immediate pivot in monetary stance.

The Fed’s benchmark rate remained anchored between 3.5% and 3.75%, holding steady for what amounted to a third consecutive unchanged decision when measured against Jerome Powell’s final months leading the central bank.

Bitcoin initially absorbed the news with sharp volatility, dipping more than $1,000 in the opening minutes after the announcement, settling below the $65,500 level after trading as high as $66,400 in the hours before the decision.

The move suggested institutional traders had positioned for either a more aggressive communication from Warsh or a sharper policy divergence from his predecessor, neither of which materialized.

For crypto market participants accustomed to parsing Federal Reserve communications as primary drivers of asset risk sentiment, Warsh’s first meeting presented a tactical puzzle. The decision itself was, as David Wessel of Brookings’ Hutchins Center on Fiscal and Monetary Policy characterized it, a “non-event”, no surprise, no new information, no hint of imminent action.

Yet Wessel added a critical qualification: Warsh now “finally has the power to change things at the Fed after years of ‘ranting about’ it,” a reference to his vocal criticism of Powell-era policy during his time outside government and his stated preference for higher rates as a hedge against inflation.

Bank of America’s Warsh Forecast Split Between Hawks and Doves

The institutional positioning ahead of Warsh’s first meeting revealed deep disagreement about his actual policy temperament. Bank of America’s fund manager survey found that 55% of respondents anticipated Warsh would deliver hawkish guidance during his press conference, a clear expectation for tighter language, hints of future rate increases, or a more restrictive bias than Powell had signaled.

That plurality view reflected Warsh’s long-standing public statements about the risks of accommodative policy and the necessity of maintaining higher rates longer to contain inflation.

However, BofA’s US economist Stephen Juneau dissented sharply from the consensus. “The investor consensus seems to be that Warsh will lean hawkish in his press conference,” Juneau said. “We think he’ll be dovish.” That contrarian call hinged on the reality that Warsh, now holding the chair, faces different institutional and political incentives than he did as a vocal outside critic.

Actual policy decisions require managing board consensus, market expectations, and economic data in real time, constraints that theoretical positions do not.

The split opinion mattered because it reflected genuine uncertainty about whether Warsh the chairman would resemble Warsh the outsider.

Bitcoin’s Intraday Swing Shows Trader Exposure to Policy Shifts

Bitcoin’s price action in the hours surrounding the announcement underscored the degree to which institutional crypto traders now monitor Federal Reserve decisions as a core macro input. The asset opened the day with downward pressure, dipping below $65,000 early in the session as some market participants de-risked ahead of the unknown.

That pessimism proved premature; as the announcement window approached, buyers re-entered, pushing Bitcoin to $66,400, a level suggesting confidence that the Fed would either hold rates or signal continued patience.

The decision itself triggered an immediate reversal. Bitcoin fell more than $1,000 in the minutes following the rate announcement, a sharp enough move to flag that some traders had positioned for either a different outcome or a more decisive policy signal from Warsh.

The scale of the move, roughly 1.5% in minutes, was modest compared to historical volatility, but it arrived on lower trading volume and in a window typically dominated by algorithmic and systematic flows rather than fundamental re-pricing. That pattern suggested traders were liquidating hawkish bets rather than responding to new economic information.

The volatility also reflected a technical reality: with rates held steady and Warsh declining to signal a policy shift, there was no clear reason for Bitcoin to hold an elevated price level. Bitcoin historically strengthens during periods of monetary loosening or dovish Fed communication, and weakens when central banks signal tighter conditions ahead.

A neutral hold, especially from a new chairman known for hawkish rhetoric, left traders without a directional anchor.

Warsh’s First Meeting Sets Stage for Summer Policy Clarity

The decision leaves the crypto market in a state of suspended judgment about Warsh’s actual inflation-fighting commitment. He spoke without delivering the hawkish forward guidance that a 55% plurality of institutional fund managers expected, yet his silence on rate hikes cannot be read as dovish either, it was simply maintenance of Powell’s existing stance.

For institutional investors building multi-quarter positioning, that ambiguity is costly because it prevents lock-in of policy direction until Warsh provides more explicit communication.

The FOMC meeting also arrives amid broader macro uncertainty about inflation trajectory. The Fed has held rates steady for months, signaling confidence that inflation is moderating toward its 2% target, but recent data has remained mixed. If inflation proves stickier than expected in coming weeks, Warsh’s first press conference will face immediate pressure for hawkish revision.

Conversely, if data continue to soften, market expectations for rate cuts could intensify, potentially bullish for risk assets including crypto.

The near-term focus for institutional crypto traders now centers on Warsh’s messaging in future meetings and whether his actions will diverge from Powell’s accommodative late tenure. Early evidence suggests he will not rush to signal a policy reversal, despite his historical hawkishness. That restraint may reflect economic judgment, political calculation, or both.

The next major policy inflection point arrives at the subsequent FOMC meeting, where updated economic projections and fresh inflation data will give Warsh a more substantive platform for signaling intent.

Investors should monitor whether Warsh’s next press conference contains any forward guidance on rate timing or inflation thresholds that would trigger future tightening, the absence or presence of such language will clarify whether his chairmanship marks a meaningful shift toward the hawkish stance he advocated as a critic, or whether institutional constraints will keep policy on Powell’s existing trajectory longer than markets now expect.

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Trump’s Explosive Interview Walkout Buried a Bigger Message for Markets

Equities, Regulation & Policy Bitcoin, Donald Trump, Federal Reserve, Inflation, Interest Rates, Kevin Warsh, Market Policy

BitcoinJune 7, 2026·5 min read

President Trump has signaled a dovish monetary policy stance and expanded military spending amid elevated geopolitical tensions, creating competing inflation pressures that will test the Federal Reserve’s independence under new Chair Kevin Warsh. Institutional investors must weigh the market implications of sustained low rates against fiscal expansion and energy market volatility tied to ongoing Middle East conflict.

Trump publicly rejected raising interest rates despite strong May payroll growth of 172,000, more than double consensus estimates of 85,000
Kevin Warsh, confirmed as Fed Chair on May 13 by the narrowest margin ever (54-45), holds his first policy meeting June 16-17 at current 3.50%-3.75% rates
Brent crude has surged from $72 to nearly $94 per barrel since late February, lifting national gas prices $1.16 to $4.17 per gallon amid Middle East escalation

172,000 May payroll jobs added, versus 85,000 consensus and signaling labor market strength
$94 Brent crude barrel price now, up from $72 before Iran conflict escalation
54-45 Senate confirmation margin for Warsh as Fed Chair, the narrowest in central bank history

President Trump has publicly opposed interest rate increases and declared that economic growth does not fuel inflation, directly contradicting decades of mainstream monetary policy doctrine and setting up a potential collision course with newly confirmed Federal Reserve Chair Kevin Warsh.

The policy pivot was buried in a contentious NBC interview that ended in a walkout, but the substance signals a significant shift in administration pressure on the central bank that will reverberate through bond, equity, and commodity markets for months ahead.

Trump’s comments came as May labor market data showed payroll growth of 172,000, roughly double the 85,000 consensus forecast, while unemployment remained steady at 4.3%, providing the administration with ammunition to argue that the economy can sustain growth without requiring Fed tightening.

The President’s rejection of the Phillips curve framework, which links tight labor markets to inflation, echoes his first-term strategy of publicly hammering then-Chair Jerome Powell to force rate cuts in 2018 and 2019.

Warsh Faces Immediate Pressure From Trump on Rates at First Policy Meeting

Kevin Warsh won Senate confirmation on May 13 by a vote of 54 to 45, the narrowest margin ever recorded for a Federal Reserve chair. He will conduct his first policy meeting on June 16 and 17 with the fed funds rate anchored at 3.50% to 3.75%, and Trump has already made clear his preference for keeping rates low regardless of labor market strength.

The timing creates a delicate political dynamic. Warsh built his reputation as a monetary hawk, opposing quantitative easing and resigning from the Fed board in 2012 rather than endorse aggressive asset purchases. Yet Trump praised him publicly while simultaneously signaling he wants rate cuts, a contradiction Warsh will have to navigate as he establishes his leadership.

Trump’s quoted position, “There’s no reason to raise interest rates. The country becomes great. We built the country by doing great and having rates low”, sets an explicit policy anchor that will be tested as soon as mid-June.

Market pricing currently reflects skepticism of Trump’s rate-cut thesis. CME FedWatch data shows traders pricing a 96% probability the Fed will hold rates steady at the June meeting, suggesting institutional capital has not yet bought into administration pressure or accepted the argument that strong growth cannot coexist with price stability.

Middle East Oil Shock Masks the Inflation Problem Trump Wants to Ignore

While Trump argues that growth will not trigger inflation, energy markets are already delivering the opposite signal. Brent crude has climbed from approximately $72 per barrel in late February to nearly $120 before settling around $94 on Friday, a 31% increase directly tied to Middle East escalation and Iran-related sanctions uncertainty.

The national average gasoline price has risen $1.16 per gallon to $4.17 since the conflict began, according to AAA data, representing a persistent cost-push inflation pressure that no monetary policy framework can easily dismiss.

Trump refused to commit to when gas prices might peak, instead tying the trajectory to geopolitical outcomes.

He stated that prices could fall “after I give them a shot” militarily, or they could decline “if we sign an agreement” with Iran, but either way will result in gasoline “drop[ping] like a rock.” A negotiated resolution would reopen the Strait of Hormuz, which currently handles roughly 20% of global oil supply, potentially releasing supply-side pressure on energy markets.

The calculus is asymmetric: energy prices have already embedded geopolitical risk, but prices can only fall once conflict resolves or a deal is reached.

Trump Signals Military Spending Expansion on Top of Record Defense Budget

Beyond the rate discussion, Trump signaled willingness to expand military spending beyond already-elevated levels. “We have debt and other things, we have things we want to take care of. I want to go bigger on the military. I really do,” he told NBC, positioning defense as a spending priority despite acknowledged fiscal constraints.

The FY2027 budget request already includes $1.5 trillion in defense spending, the largest single-year defense total since World War II according to the Center for Strategic and International Studies.

The Office of Management and Budget projects a $2.06 trillion deficit in the current fiscal year, expected to widen to $2.17 trillion, creating a fiscal backdrop in which additional military spending would compound existing imbalances.

This combination, simultaneous pressure for lower rates and higher defense budgets, creates a classic stagflationary scenario: monetary accommodation meets fiscal expansion and geopolitical disruption. Institutional investors must evaluate whether Warsh will resist Trump’s rate preferences or acquiesce to administration pressure as he establishes his tenure.

The June 16-17 Fed meeting will provide the first hard test of that independence.

The critical date is Warsh’s first policy decision on June 16-17, which will signal whether the new Fed chair can maintain rate stability against Trump’s public dovishness or whether administration pressure begins shifting monetary policy.

Watch whether any member of the Fed’s new leadership team publicly defends the current rate stance independent of White House messaging, and whether geopolitical developments alter the oil price trajectory enough to force Warsh’s hand toward tightening despite Trump’s opposition.

Warsh’s Narrow Mandate Collides With Fiscal-Monetary Mismatch

Kevin Warsh’s 54-45 Senate confirmation, the narrowest margin for any Federal Reserve chair in history, leaves him vulnerable to political pressure at precisely the moment when fiscal and monetary policy are diverging sharply.

The incoming chair inherits a central bank expected to cut rates while the administration pursues expanded military spending and resists rate increases, a combination that typically generates sustained inflation pressure rather than the disinflation narrative Warsh may need to justify policy moves to skeptical lawmakers.

The fiscal-monetary split is quantifiable: the Congressional Budget Office projects a 2025 federal deficit of 6.1% of GDP, up from 5.5% in 2024, while oil markets, a leading inflation indicator, have priced in persistent supply concerns reflected in the 31% surge in Brent crude since February.

Warsh faces the institutional challenge of maintaining Fed independence while operating under a 54-vote Senate majority that confirmed him only because three Republicans broke ranks; any dovish rate cuts could invite immediate calls for oversight hearings, particularly if inflation remains above the Fed’s 2% target.

The first test arrives at Warsh’s June 16-17 policy meeting, where market participants will scrutinize both the rate decision (currently priced at 75% probability of a hold) and the forward guidance language, specifically whether the Fed signals flexibility on inflation tolerance or maintains hawkish language that contradicts Trump’s stated preferences. If Warsh signals rate cuts later this year despite sticky inflation readings, institutional investors should monitor Capitol Hill rhetoric for signs that Senate Republicans will use oversight authority to constrain future policy moves.

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ECB keeps its nerve as Trump ramps up global trade tension

Equities, Regulation & Policy Christine Lagarde, Donald Trump, European Central Bank, Inflation, Interest Rates, Monetary Policy, Trade Tensions

The ECB is refusing to blink. Even as Donald Trump threatens to slap a 30% tariff on imports and crank up global trade tensions, the European Central Bank decided Thursday it wouldn’t react just yet.

They’re locking rates at 2% and postponing any cut in borrowing costs. The move comes right before their seven-week summer break, with policymakers clearly choosing to wait and see if Trump’s threats actually turn into pain before they make a move.

The logic is simple: don’t rush. A lot of officials are about to disappear on holiday. They’d rather keep repeating that inflation is on target, park any panic until the next batch of economic projections is available for the September 10–11 meeting, and deal with it then.

That means no new action now, but no denial either that things are getting ugly. The euro’s getting stronger, which is hitting exporters and dragging down inflation forecasts. France’s messy budget problems are adding more heat at the worst time.

ECB watches data, ignores panic

Behind closed doors, the ECB knows the pressure is building. A rate cut in September is clearly back on the table, even if they keep hiding behind the usual “meeting-by-meeting” line.

President Christine Lagarde didn’t flinch in her statement Thursday, repeating that “risks to growth are tilted to the downside,” as flagged by Morgan Stanley economists in their preview titled Ready for the Beach. The coming week will pour in the data the ECB needs to weigh that risk.

On Tuesday, their own bank lending survey drops. Wednesday follows with a consumer confidence report, and Thursday will deliver purchasing manager indexes from all across the region, conveniently right before policymakers log off. Germany’s Ifo business confidence and Italy’s economic sentiment numbers wrap the week up on Friday.

Outside the euro area, more inflation data will fly in from Japan, Brazil, and others, while Bank of England chief Andrew Bailey will testify to UK lawmakers about financial stability.His appearance comes just as the UK drops public finance data on Tuesday and faces PMI figures and retail sales later in the week.

Global markets brace as central banks diverge

Over in the US, the economic calendar is light.A Wednesday housing report is expected to show barely any change in the sale of existing homes.

Numbers have been flatlined near a 4 million annualized rate, just slightly better than the 2010 post-crisis low. Thursday brings a report that might show a modest bounce in new home sales, after a brutal drop in June.But the truth is the US housing market is still locked in place.High mortgage rates and unaffordable prices are keeping buyers out.

Meanwhile, Canada’s economic mood gets measured through business and consumer surveys this week. They’ll give insight into inflation fears and investment trends. Retail sales data for May and June could also confirm that shoppers are retreating, especially after tariffs spiked car purchases earlier in the year.

In Asia, everyone’s scrambling to make sense of global trade chaos. South Korea opens the week with export data, followed by confidence and retail numbers. China will keep loan prime rates steady for the second straight month.

Over in Africa, South Africa will show June inflation is likely up to 3.1% from 2.8%, thanks to meat prices. In Nigeria, the central bank will likely keep rates frozen at 27.5%, for the third straight time, with inflation still hot at 22.2%.

In Latin America, Argentina releases its May GDP-proxy Monday. April saw a 1.9% monthly jump and 7.7% year-over-year, helped by President Javier Milei’s move to loosen currency controls tied to a $20 billion IMF deal. Analysts now expect Argentina’s second-quarter GDP to grow 8%, and third quarter by 4.2%, according to Bloomberg.

Mexico is under pressure too. The Tuesday GDP-proxy print will follow April’s surprise strength, and inflation eased in June, finally, and the central bank has hinted it may now slow its easing plans.

Brazil will close the week with its mid-month inflation report, likely down for a third straight time, driven by sky-high borrowing costs. But expectations for 2025 inflation are still above target.

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Trump says he regrets taking advice to hire Powell

AI News, Institutional, Real World Assets, Regulation & Policy Donald Trump, Economic Policy, Federal Reserve, Inflation, Interest Rates, Jerome Powell, Monetary Policy

President Donald Trump unloaded his longest attack yet on Jerome Powell on Friday evening, five months after moving back into the White House.

Speaking via Truth Social, Trump said he should’ve never made Powell head of the Federal Reserve and once again blamed him for costing the US up to $1 trillion a year by keeping interest rates too high. He said, “Too Late Powell complains about costs, much of which were produced by the Biden Fake ‘Government.’”

Trump added that Powell should cut rates to between 1% and 2% immediately. He said this would save the country massive amounts in interest payments. “That ‘numbskull’ would be saving the United States of America up to $1 Trillion Dollars per year,” Trump posted.

Trump says he regrets taking advice to hire Powell

The president claimed he tried “nice, neutral, and nasty” approaches to pressure Powell but said only being nasty got attention. He wrote, “He’s a dumb guy, and an obvious Trump Hater, who should have never been there.”

Trump said he took bad advice when he picked Powell and said Biden made a mistake by keeping him. Trump also said inflation is no longer a concern and the economy is growing fast with factories opening and new tariffs bringing in strong revenue.

He said the Fed should take advantage of this moment and drop rates. “If he was concerned about inflation or anything else, then all he has to do is bring the rate down, so we can benefit on interest costs, and raise it in the future when and if these ‘other elements’ happen (which I doubt they will!),” Trump said.

The rant ended with Trump calling Powell a “total and complete moron” and saying the Federal Reserve Board should override him. He also hinted, again, that he might fire him. “Maybe, just maybe, I’ll have to change my mind about firing him? But regardless, his Term ends shortly!” Trump then posted the custom-made image of comparison below for extra theatrics:

Trump-Powell — Source: Office of the President of the United States

Waller pushes for July cut while others urge patience

According to Reuters, this came just hours before Powell and other Fed officials spoke publicly for the first time since holding interest rates steady this week. The Fed decided to keep rates between 4.25% and 4.5% for now. Behind the scenes, policymakers are split on what to do next. Some believe inflation is still too high. Others want to cut rates soon.

Christopher Waller, a Fed Governor, said Friday on CNBC that he believes inflation isn’t a real threat right now and that the Fed should move forward with cuts as early as next month. “The data the last few months has been showing that trend inflation is looking pretty good,” Waller said. He also said rising tariffs will not create serious inflation. “Any tariff inflation… I don’t think is going to be that big and we should just look through it in terms of setting policy,” he added.

Waller said the Fed shouldn’t sit around and wait for the labor market to get worse. He pointed to signs of stress, including high unemployment among recent college graduates. “I’m all in favor of saying maybe we should start thinking about cutting the policy rate at the next meeting,” he said.

Mary Daly, who runs the San Francisco Fed, offered a more middle-ground view. She told CNBC that a fall rate cut might make sense, but not in July. “A rate cut in the fall would be more appropriate,” she said, unless the labor market weakens faster than expected. She also warned that tariffs could push up costs but said businesses might absorb the hit instead of passing it to buyers.

Daly warned against rushing into cuts without solid data. But she said the Fed also can’t ignore how much the economy is cooling. “We cannot wait so long that we forget that the fundamentals of the economy are moving in a direction where an interest rate adjustment might be necessary,” Daly said.

The latest projections from the Fed show a near 50-50 split. Eight officials expect two rate cuts this year. Seven think there should be none. Those expecting cuts believe the September and December meetings could be the moments to act. The rest want to keep things where they are.

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