Bitcoin jumped back above $60,000, gold pushed past $4,050, and silver tagged along for the ride after Federal Reserve Chair Kevin Warsh told markets something they desperately wanted to hear: inflation risks have come down.
The comments, delivered at the ECB’s annual Sintra forum on July 1, marked a notable tonal shift from the hawkish posture the Fed struck just two weeks earlier. Markets responded by pricing in lower odds of near-term rate hikes, giving both risk assets and precious metals room to breathe.
What Warsh actually said, and why it matters
Warsh’s core message was deceptively simple. He acknowledged that inflation risks “have come down” in recent weeks while reaffirming the Fed’s commitment to its 2% target. He offered zero forward guidance on where rates are headed next.
This stands in sharp contrast to the tone set at the June 17-18 FOMC meeting, Warsh’s first as chair. At that gathering, the Fed held interest rates steady between 3.50% and 3.75% but revised its median federal funds rate projection upward to 3.8%, up from 3.4% previously. Nine of 18 officials indicated they expected at least one rate hike before the year ends.
