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Key Takeaways
- Kevin Warsh chairs his first Fed meeting on June 16, having divested more than 20 crypto-linked investments including Solana and dYdX positions under Fed ethics rules
- A rate hold at 3.50%-3.75% is near-certain, but the updated dot plot could signal future hikes and quickly reprice crypto market expectations
- Warsh’s opposition to CBDCs and reduced forward guidance stance could increase market volatility, with his June 17 press conference closely watched for rate-path signals
Kevin Warsh chairs his first Federal Reserve policy meeting on June 16, with markets watching for rate signals that could move cryptocurrency prices. Warsh, who replaced Jerome Powell in May, has divested more than 20 crypto-linked investments under Fed ethics rules and is expected to adopt a more hawkish tone on inflation than his predecessor.
Warsh Sold More Than 20 Crypto-Linked Investments Before Taking the Job
Financial disclosures showed Warsh held more than 20 crypto-linked investments prior to taking office, including positions in Solana, Compound, and the decentralized exchange dYdX, as well as a stake in Bitcoin payments startup Flashnet.
Under Federal Reserve ethics rules, he divested all of those holdings before assuming the role. Bloomberg confirmed the sale through a certificate of divestiture from the Office of Government Ethics.
Fed Rate Hold Expected, but Dot Plot Could Signal Hikes Ahead
Markets are pricing in a near-certain rate hold at 3.50% to 3.75% for the June 17 decision. The more closely watched release will be the updated Summary of Economic Projections, commonly referred to as the dot plot. May CPI came in at 4.2%, with energy prices rising due to the conflict in Iran and disruptions to the Strait of Hormuz accounting for most of the monthly increase.
If the dot plot shows Fed officials projecting a rate hike rather than a cut, Bitcoin could face selling pressure, analysts say. Prediction markets, including Polymarket and Kalshi, currently put the odds of at least one 2026 rate hike at between 50% and 65%, and the dot plot could reprice those expectations quickly.
The Fed’s standard signal that its next move is more likely a cut than a hike, known as an easing bias, may also be absent from the June statement. Analysts say markets could read that absence as a hawkish signal.
Warsh Has Criticized Excessive Fed Forward Guidance
Warsh has long argued that the Fed over-communicates. A Charles Schwab research note on his policy positions states he views excessive forward guidance as a credibility risk rather than a service to markets.
His first post-meeting press conference is expected to be shorter and less forthcoming with rate-path signals than Powell’s briefings were. Reduced forward guidance from Warsh could increase market volatility, according to the Charles Schwab analysis.
Warsh Has Opposed CBDCs and Signaled Support for Stablecoin Legislation
Warsh has divested his crypto holdings under Fed ethics rules and signaled a hawkish inflation stance, narrowing expectations of an immediate crypto-friendly policy shift. Warsh has publicly opposed a central bank digital currency and signaled openness to stablecoin legislation. Warsh’s first press conference on June 17 will be the initial test of his rate signaling, with analysts saying a higher-for-longer message could weigh on crypto prices.
