Warsh's Hawkish Stance Sends Ripples Through Markets

Federal Reserve Chair Kevin Warsh's speech at Jackson Hole has sent shockwaves through markets. He warned that inflation has not meaningfully slowed and policymakers will have 'work to do' if price pressures don't move towards the 2% target.

Bitcoin fell below $80,000 after Warsh's comments pushed short-term Treasury yields higher and reduced some of the recent risk appetite across financial markets. The cryptocurrency dropped as much as 3.2% to $77,427.

The market reaction was described by Wintermute OTC trader Jasper De Maere as 'relatively contained', but crypto investors are also watching longer-term technical indicators. Galaxy Digital noted that in four of the five completed crypto bear markets, the market bottom was definitively established after the 50-week moving average was first broken to the upside.

Gold prices declined nearly 3% on Friday as traders raised expectations for a September rate increase following Warsh's remarks. Spot gold fell 3.13% to $4,457.17 an ounce, while US gold futures for December delivery settled 3.35% lower at $4,529.90.