Bitcoin Drops 3% Amid Kevin Warsh’s Jackson Hole Hawkish Speech

Bitcoin (BTC) and the overall crypto market cap are down 3.23% and 2.97%, respectively, in the past 24 hours after the Fed delivered a hawkish outlook at today’s Jackson Hole event. Ethereum (ETH) and XRP moved in tandem, falling 2.7% and 4.89% over the same time period.

Notably, Jackson Hole is an international conference that hosts various financial players to discuss macroeconomic policy. It provides possible future directions for the US Federal Reserve, which has historically moved markets in either direction.

Today’s event was Kevin Warsh’s first as Fed Chair, and he said the Fed still has work to do on inflation.

Key Fed notes that affected BTC, ETH, and XRP

Warsh began by noting that the economy remains strong and resilient, with unemployment (currently at 4.1%) nearing a multi-decade low.

Source: FRED

Nonetheless, PCE inflation remains at 3.7% in the last year, and 4.1% annualized over the past six months, both well above the Fed’s “firm and fixed” target of 2%. Even more, 54% of the components of the PCE basket have risen by 3% in the past year, suggesting inflation is still at large.

According to Warsh, several signs show that the current financial conditions remain non “restrictive.” These include relatively friendly lending standards, liberal credit markets, and tight credit spreads, as seen below.