XRP slides to $1.38 as Fed's Warsh flags inflation fight

XRP fell to $1.38 as Fed Chair Warsh's inflation comments pushed traders to price in a 50 percent chance of a September rate hike.

"On the price-stability side of our mandate, the numbers are more concerning," Warsh said at the Jackson Hole symposium in Wyoming. "We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do."

The remarks triggered a broad crypto selloff. Bitcoin dropped as low as $78,630 before recovering to $79,474, while Ethereum traded at $2,503.63, Solana at $105.57, and BNB at $706.04, according to CoinGecko data. XRP's 5.49 percent decline on the day outpaced most major tokens, with the token sliding from $1.42 earlier in the week.

The Fed's next rate decision is scheduled for September 17. Cleveland Fed President Beth Hammack, one of three voting members who supported a quarter-point increase in July, said the central bank should consider raising rates. The Fed currently holds rates between 3.5 percent and 3.75 percent.

Rate Hike Odds Jump After Warsh's Remarks

Before Warsh spoke, futures markets implied a 66.3 percent probability of rates staying unchanged in September and a 33.7 percent chance of a hike, per Ash Crypto. After his comments, traders priced in a 50 percent chance of a rate increase. The hawkish tone also weighed on equities — S&P 500 futures traded slightly below flat, while Nasdaq 100 futures declined 0.3 percent.

Warsh's speech came as the Treasury market faces its own pressures. The 30-year Treasury yield is near its highest level since 2007, and Treasury Secretary Scott Bessent has doubled the size of long-dated bond buybacks. The Jackson Hole symposium this year carries the theme "Financial Innovation: Implications for Payments and Policy," with cryptocurrencies and stablecoins on the agenda. Warsh has generally avoided detailed forward guidance since taking leadership in May, making the conditions he highlights more important than any specific forecast.

For crypto investors, the stakes are clear. Higher rates reduce liquidity available for risk assets, and XRP's slide below $1.40 could trigger further downside if the Fed follows through with a hike. The token's decline comes even as positive regulatory momentum builds — President Donald Trump last week called the crypto Clarity Act a "very, very powerful" piece of legislation and urged lawmakers to pass it.

Bitcoin's resilience above $79,000 suggests some buyers remain, but the broader market's direction now hinges on the September 17 Fed decision. If Warsh's inflation concerns translate into a rate increase, altcoins like XRP could face additional selling pressure.

This article is for informational purposes only and does not constitute investment advice.