Kevin Warsh, confirmed as Federal Reserve Chair in May, chaired his first FOMC meeting on June 17, 2026. The committee held the federal funds rate at 3.50%-3.75% and pledged to deliver price stability. The hawkish tone sent the dollar soaring, while gold and Bitcoin tumbled.
Warsh signaled openness to further shrinking the Fed’s $6.8 trillion balance sheet to restore market price signals. He also highlighted AI-driven productivity gains as a potential disinflationary force that could ease inflation without crushing growth.
Financial markets reacted swiftly. The U.S. dollar strengthened sharply against major currencies. Precious metals declined steeply, and Bitcoin dropped amid fears that tighter liquidity could erode risk appetite.
For crypto investors, a Fed determined to drain liquidity poses near-term headwinds. If AI-driven efficiency lowers inflation naturally, the central bank might eventually ease its stance, benefiting risk assets once again.