June 17 — Day X: How Bitcoin Will React to the First Fed Meeting Under Kevin Warsh
The Federal Reserve meeting on June 17 could be a key moment for the cryptocurrency market. Although a rate cut is not expected on this day — U.S. inflation has reached 4.2% (for the first time since May 2023), and geopolitical risks in the Middle East remain high — the regulator will likely maintain a hawkish tone but lay the groundwork for the first easing in a long cycle by December. Bitcoin, in turn, shows potential for a move toward $67,000, but this is merely a local bounce, not a trend reversal.
Inflation at 4.2% and the Geopolitical Backdrop: Key Drivers
The rise in inflation to 4.2% is an alarming signal, especially amid high oil prices that have stayed above a painful threshold for the market. The key factor here is the conflict between the U.S. and Iran: a 14-point memorandum published by an Iranian agency looks more like a capitulation by Washington than a victory. Iran retains its nuclear program, missile arsenal, and control over the Strait of Hormuz, while securing the unfreezing of $24 billion and the lifting of sanctions. For markets, this is short-term positive, but large capital, as practice shows, will sell into strength.
Oil remains the main variable. If the Strait of Hormuz opens and prices decline, inflationary pressure will ease, and the situation will change dramatically. However, for now, we see the opposite: geopolitical tensions continue to fuel energy costs, limiting the Fed's ability to ease policy.
Warsh's Scenario: Hawkish Words, Dovish Actions
The first meeting of Kevin Warsh — the new Fed chair — will pass without a rate change (the probability of a cut in June is only 5%). A sharp easing with inflation above 4% would turn Warsh into a "White House puppet" and trigger a rise in bond yields. Therefore, the regulator will likely choose a tactic of "hawkish words with dovish actions": altering the balance sheet structure by selling short-term and buying long-term securities, which lowers yields without activating the printing press.
On the day of the meeting, a false downward move is expected (minus 1.5–2% on the S&P 500) due to a hawkish tone at the press conference, followed by a recovery to neutral or slightly positive levels by the close. The calendar ahead: July — a pause with a hawkish tone, September — market preparation for normalization (35–40% probability of a cut with inflation around 3.7–3.8%), December — the first 25-basis-point cut with a 60–65% probability. The main risk to this forecast is a new escalation in the Middle East and oil above $100.
Bitcoin: From $62,000 to $67,000, But This Is Not a Reversal
Bitcoin reacts 100% to Fed meetings: over the last five meetings, the reaction has been unstable (three declines, two gains). After testing the $60,000 zone, the asset began to recover. Holding the $62,000 level has opened up potential for a move toward $67,000 in the coming weeks. However, this is merely a local bounce, not a trend reversal. Based on historical cycles, the market bottom may form closer to autumn.
My analysis: The current rise in bitcoin is a reaction to a temporary easing of pressure, not to fundamental changes. As long as inflation remains above 4% and geopolitical risks do not subside, any bounce should be viewed as an opportunity to take profits, not for long-term purchases. A sustained bullish trend can only be expected after the first Fed rate cut, which, in my estimation, will not occur before December.