June 17 is a turning point for Bitcoin: what to expect from the first Fed meeting under Warsh's leadership
The Federal Reserve meeting on June 17, the first chaired by Kevin Warsh, promises to be a key moment for the cryptocurrency market. While a key rate cut is not expected, the regulator's rhetoric and the macroeconomic backdrop could set the direction for Bitcoin in the coming weeks.
US inflation, according to the latest CPI data from June 10, unexpectedly accelerated to 4.2% — the first time since May 2023. The indicator had been steadily declining, but now it shows growth. The main driver of this surge is high oil prices, which remain above the painful market threshold amid escalating tensions between the US and Iran.
Macroeconomic Backdrop: Oil and Geopolitics
For now, the discussed deal to resolve the conflict with Iran looks more like a Washington capitulation. In a 14-point memorandum published by an Iranian agency, Tehran retains its nuclear program, missile arsenal, and control over the Strait of Hormuz, while receiving the unfreezing of $24 billion and the lifting of sanctions. For markets, signing could provide short-term positivity, but large capital will likely take profits on the news.
The key point is oil. If the Strait of Hormuz opens and prices decline, inflationary pressure will ease, and the situation could change dramatically. For now, we see that the regulator has to balance between hawkish rhetoric and technical easing.
Warsh's Scenario: Tough Words, Soft Actions
At this meeting, the probability of a rate cut is estimated at 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 most likely scenario is: hawkish rhetoric in words with technical easing in deeds. This involves changing the structure of the Fed's balance sheet by selling short-term and buying long-term securities — which lowers yields without running the printing press.
On the day of the meeting, expect a false downward move (minus 1.5–2% on the S&P 500) due to the hawkish tone of the press conference, followed by a recovery to neutral or slightly positive levels by the close.
Forecast for Rates and Bitcoin
Next: 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 overall probability of at least one cut by year-end is 60%, while a hike is virtually zero. The main risk is a new escalation in the Middle East and oil above $100.
Bitcoin, historically, reacts extremely volatile to Fed meetings: over the last five meetings, there were three declines and two gains. After testing the $60,000 zone, the asset began to recover. Holding the $62,000 level opened up potential for a move to $67,000 in the coming weeks. However, this is more of a local bounce rather than a trend reversal. Based on historical cycles, the market bottom may form closer to autumn.
My expert opinion: The current situation resembles a game of "cat and mouse" between the market and the Fed. Bitcoin is using the pause in tightening for a local rally, but the fundamental risks — inflation, geopolitics, and high cost of capital — have not gone away. Investors should be prepared for increased volatility in the next 48 hours, but not confuse a short-term bounce with the start of a new bull cycle.