Key Takeaways
Bitcoin (BTC) fell 0.83% to $76,968.66 on Friday after Federal Reserve Governor Christopher Waller said the central bank’s next move could be an interest-rate increase, challenging market expectations for cuts.
"You just can't look at this data and say, 'Oh yeah, we could cut rates here by September' or something," Waller said Friday during an event in Frankfurt, Germany. "You can't be serious as a central banker and talk about that."
Waller’s comments came as the U.S. Dollar Index edged up 0.02% to 95.84 and crude oil traded at $97.22 a barrel. He pointed to higher energy and commodity costs since late February as a key reason why “inflation is not headed in the right direction.” He joins three other Fed officials in calling for a neutral policy stance.
The remarks inject a dose of hawkish uncertainty into the market on the same day Kevin Warsh was sworn in as the new Federal Reserve Chair. While President Trump has pressured the Fed to lower rates, Waller's stance suggests any easing path faces significant internal resistance, potentially capping risk assets like Bitcoin in the near term.
Waller, who had previously advocated for lower rates to support the labor market, said recent inflation and labor reports "just turned me the other way." He argued for removing the "easing bias" language from the Federal Open Market Committee's policy statement to reflect that a rate hike is now as plausible as a cut.
His pivot aligns him with Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari, and Dallas Fed President Lori Logan, who all dissented at the last FOMC meeting over its dovish forward guidance.
The hawkish turn comes as a shock to a market that had been pricing in rate cuts for the second half of the year. The shift in tone from a key Fed governor could force a broader repricing of risk across asset classes, including Ethereum (ETH) and the wider crypto market.
This article is for informational purposes only and does not constitute investment advice.
