Bitcoin (BTC) reclaimed $60,000 on Wednesday after Federal Reserve Chair Kevin Warsh said inflation risks had eased and struck an open-minded tone on artificial intelligence (AI), reviving appetite for risk assets and precious metals.
The Fed chief declined to call the AI spending boom inflationary and flagged easing price risks, a tone traders judged less hawkish than his June debut. Gold also climbed alongside Bitcoin.
Bitcoin and Gold Price Performance. Source: TradingView
Kevin Warsh Cools Fears of Higher Rates
Warsh spoke at the ECB Forum on Central Banking in Sintra, Portugal, his first international appearance as Fed chair. A longtime inflation hawk, he served on the Fed board through the 2008 crisis. He resigned in 2011 over a $600 billion bond-buying plan.
His words carried weight because US inflation has run hot. Consumer prices rose 4.2% in the year to May, the fastest since 2023, as the war with Iran lifted oil.
That drove the Fed to hold rates at 3.5% to 3.75% in June and signal a possible hike. Those fears eased after oil prices retreated in late June.
Speaking on a panel in Sintra, Warsh pointed to easing price pressures since he took over.
“Inflation risks have come down.”
Yet he insisted the work was not done, recommitting to price stability.
“We’re all in the price stability business … we’ve all looked around and we’ve seen that prices are too high.”
On AI, Warsh was upbeat, calling it a driver of productivity while leaving its inflation impact open.
Kevin Warsh observes that it's up to the Fed to determine whether the AI boom is going to be inflationary.
Notably, some Fed officials have tied AI-driven inflation concerns to the case for hikes.
“What they say is that the demand is insatiable, that these companies, these hyperscalers, will pay almost any price for those inputs, and they need things built yesterday,” Cleveland Federal Reserve President Beth Hammack said recently.
Bitcoin Reclaims $60,000 as Gold Rebounds
Bitcoin traded near $60,088, up about 2.8% in 24 hours, while Ethereum rose about 3.3% to near $1,619. The gains lifted Bitcoin back above $60,000 and its market value over $1.2 trillion.
The bounce followed a steep month. Bitcoin had slid to its 2026 low near $58,000 last week, after hot May inflation triggered $1.26 billion in liquidations. It remains down about 16% from a month ago.
Meanwhile, gold rebounded to an intra-day high of $4,115 after sliding to multi-month lows this week. Silver and other precious metals gained as bets on aggressive tightening eased.
🚨 Massive reversal in precious metals after Kevin Warsh signals inflation risk is decreasing.
Over $1.25 trillion has been added to precious metals in the last 6 hours.
Gold is up +3.7%, adding $1.05 trillion in market value.
The bond market was less convinced. Treasury yields rose, with the 10-year note near 4.46%. Rising Treasury yields mean bond investors were pricing in higher-for-longer interest rates.
It follows Warsh stressing that prices are “too high” and signaling no rate cut, a hawkish read that ran opposite to the risk-on rally in Bitcoin and gold.
Warsh held a firm line on prices and gave no hint of a July cut. This week’s US jobs report and the Fed’s next meeting, about four weeks away, will test the rally.
