Warsh rejects forward guidance, leaving Bitcoin traders without clues

Federal Reserve Chair Kevin Warsh marked his 100th day by declaring that forward guidance had overstayed its welcome. Warsh said market participants will always anticipate the Federal Reserve's next action. He said the central bank should not encourage traders to look primarily to it for their next trade. Warsh did not directly mention crypto. Bitcoin traded near $80,000 before Warsh's speech. Bitcoin briefly fell by about $1,000 after Warsh said the Federal Reserve still had work to do on inflation. Bitcoin recovered almost immediately. The broader crypto market stood near a $2.7 trillion market cap. The market was down 0.2% today. The PCE price index was running at 3.7% annually. The Federal Reserve's inflation target is 2%. Warsh said 54% of tracked goods and services had recorded price gains above 3% over the past year. Warsh gave no timeline for when that share would change. Bitcoin's rally exceeded 20% over the prior week. The rally was fueled largely by the Treasury Department's move to buy back more long-dated debt. CME FedWatch data showed a 38.4% chance of a September rate hike. That probability was 82% a month earlier. The remaining market participants were betting on no rate change. The next rate decision is scheduled for September 15-16. The decision will come with new Federal Reserve economic projections.