Federal Reserve Chairman Kevin Warsh completed his first keynote address at Jackson Hall’s annual meeting after 100 days, but the market did not wait for a new interest-rate trail. For encrypted traders, this was supposed to be an important speech to observe the direction of policy, and ultimately left only a stronger lookout.

Warsh dilution policy suggests

Warsh stated that the “forward guidance” that the Fed had used for many years was no longer appropriate in the current environment. Forward-looking guidance refers to the tendency of central banks to transmit future interest rate trends to markets through public statements.

In his view, market judgement would be distorted if traders relied too heavily on the Fed ' s verbal implication rather than directly based on economic data. This also means that he does not intend to release a clear policy signal in advance of the Jackson Hole meeting, as was the case with some past Fed Presidents.

Bitcoin short-line backsliding.

During the speech, bitcoin fell by about $1,000, but quickly recovered the fall. Overall, the market response was relatively limited.

Prior to the presentation, Bitcoin had broken by $80,000 this week, leading to a cumulative increase of more than 20 per cent over the past week. It was reported that the increase was more related to the increase in the United States Treasury's long-term national debt buy-back than to a new statement from the Fed.

Inflation still suppresses the easing of expectations

Warsh did not speak directly about encrypted currency, but stressed that the Federal Reserve was still focusing on inflation and stated that “there is still work to be done” in reducing inflation. This statement was interpreted by the market as hawks.

The Fed's preferred inflation indicator, PCE, currently rising by 3.7 per cent over the same period, is still significantly above the target of 2 per cent. Warsh also mentioned that 54 per cent of the goods and services tracked by the Fed had increased by more than 3 per cent over the past year.

For non-interest-bearing assets such as bitcoin, maintaining interest rates at a high level usually means higher financing costs, more attractive bonds and more difficult financial flows to encrypted assets. The next key window will be the Fed's interest rate meeting from 15 to 16 September, at which time new economic projections will be published simultaneously.