Bitcoin Tumbles Below $78,000 as Fed's Warsh Signals Rate Hike
Bitcoin's price has dropped below $78,000 after Federal Reserve Chair Kevin Warsh hinted at a potential rate hike in his keynote address at the Jackson Hole symposium. Warsh stated that if inflation doesn't ease soon, the Fed will have 'work to do', and he described the current labour market as robust while expressing concern about price stability.
The Fed has missed its 2 percent inflation target for 65 months, and its preferred gauge, the PCE price index, recently ran at an annual rate of 3.7 percent. Warsh explicitly declined to read recent better-than-expected inflation readings as a turning point.
In futures markets, the odds of a rate increase at the September meeting jumped to 60 percent from 35 percent a day earlier. The two-year US Treasury yield rose to 4.33 percent, and the dollar gained 0.4 percent against a basket of currencies.