Federal Reserve Chairman Kevin Warsh delivered his first keynote speech a hundred days after taking office at the Jackson Hole Symposium, but the market did not receive any new clues regarding interest rates. For crypto traders, what was once seen as an important speech to observe policy trends ultimately only left behind a stronger sentiment of waiting and seeing.

Warsh Downplay Policy Implications

Warsh indicates that the 'forward guidance' commonly used by the Federal Reserve in previous years is no longer suitable for the current environment. Forward guidance refers to the central bank's public statements that convey its expectations regarding future interest rate trends to the market.

He believes that if traders rely too heavily on the Fed's verbal hints rather than pricing directly based on economic data, market judgments will be distorted. This also means that he does not intend to release clear policy signals in advance at the Jackson Hole Symposium, as some previous Fed chairmen have done.

Bitcoin stabilizes after a short-term decline

During the speech, Bitcoin fell by about $1,000 at one point, but then quickly recovered from that loss. Overall, the market reaction was relatively limited.

Before the speech, Bitcoin broke through $80,000 for the first time this week, driving a cumulative increase of over 20% in the past week. Reports indicate that this rise is more related to the U.S. Treasury Department's increased repurchase of long-term government bonds, rather than any new statements from the Federal Reserve.

Inflation still dampens expectations for loose monetary policies

Warsh did not directly mention cryptocurrencies in his speech, but he emphasized that the Federal Reserve is still primarily focused on inflation and stated that 'there is still work to be done' in bringing down inflation. This stance has been interpreted by the market as hawkish.

The inflation indicator favored by the Federal Reserve, PCE, is currently up 3.7% year-on-year, still significantly higher than the target of 2%. Warsh also mentions that among the goods and services tracked by the Federal Reserve, 54% have seen increases of over 3% in the past year.

For non-interest-bearing assets such as Bitcoin, high interest rates typically mean higher financing costs, making bonds more attractive and making it harder for funds to flow towards crypto assets. The next key window will be the Federal Reserve's interest rate meeting on September 15th to 16th, during which new economic forecasts will also be released.