Crypto news

June 17 could become a key date for the crypto market, although a rate cut at this meeting should not be expected. The first Federal Reserve meeting under new Chairman Kevin Warsh takes place against a backdrop of 4.2% inflation and escalating geopolitical risks between the US and Iran. The regulator will likely maintain a hawkish tone but is already laying the groundwork for the first easing of the cycle by December. Under these conditions, Bitcoin retains the potential for a local bounce to $67,000.

Inflation, Oil, and Geopolitics: A Triple Blow to the Market

According to the latest CPI data from June 10, US inflation rose to 4.2% — the first time since May 2023. The key difference: back then, the indicator was declining, but now it is steadily rising. The main driver is high oil prices, which remain above the painful market threshold amid the conflict in the Strait of Hormuz.

Negotiations between the US and Iran look more like a capitulation by Washington. Iran retains its nuclear program, missile arsenal, and control over the strait, securing the unfreezing of $24 billion and the lifting of sanctions. For markets, signing a memorandum will bring only short-term positivity, but large capital will sell into strength. The key factor is oil: if the strait opens and prices decline, inflationary pressure will ease dramatically.

Warsh's Scenario: Tough Words, Soft Actions

Kevin Warsh's first meeting will pass without a rate cut — the probability of this in June is estimated at 5%. A sharp easing with inflation above 4% would turn him into a "White House puppet" and trigger a rise in bond yields. In practice, we will see hawkish rhetoric alongside technical easing: changing the Fed's balance sheet structure by selling short-term and buying long-term securities. This lowers yields without activating the printing press.

On the meeting day, a false downward move is expected (minus 1.5–2% for the S&P) due to the hawkish tone of the press conference, followed by a recovery to neutral or slightly positive levels by the close. Then: 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 the probability of a hike is nearly zero. The main risk to the forecast is renewed escalation in the Middle East and oil above $100.

Bitcoin: Reaction and Targets

Bitcoin will react 100% to the meeting: over the last five Fed meetings, the reaction has been volatile (three declines, 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 a local bounce, not a trend reversal. Based on historical cycles, the market bottom may form closer to autumn.

My comment: The market underestimates how strongly geopolitics affects inflation and, consequently, monetary policy. If oil remains above $90, the scenario of a rate cut in December is in question. In this environment, Bitcoin is an ideal tool for short-term speculation, but not for long-term accumulation without a clear signal from the Fed.