Bitcoin (BTC) advanced toward the $60,000 level on Wednesday after Federal Reserve Chair Kevin Warsh said inflation risks have eased, while reaffirming the central bank’s commitment to its 2% inflation objective.
Warsh offered no guidance on the Fed’s next rate decision, saying policymakers will assess incoming data at their meeting in four weeks during a panel at the European Central Bank’s annual forum in Sintra, Portugal.
He emphasized instead that the Fed remains squarely focused on restoring price stability.
“Inflation risks have come down,” Warsh said, adding that any expectation of the Fed accepting inflation above 2% would be misguided. “We’re going to deliver price stability in the U.S.”
Following the remarks, bitcoin recovered from earlier losses and traded back near $60,000, rising more than 2% over the past 24 hours, according to CoinDesk data.
Warsh also pointed to artificial intelligence as a potentially transformative economic force, saying the current wave of AI-related investment is boosting demand in the short term but could eventually increase the economy’s productive capacity.
He noted that unlike past cycles driven by financial engineering such as share buybacks, firms are now investing on expectations that AI will significantly lift productivity. If that materializes, it could have important implications for monetary policy, though he said it is still too early to draw firm conclusions.
The panel also included European Central Bank President Christine Lagarde, Bank of England Governor Andrew Bailey, and Bank of Canada Governor Tiff Macklem, who largely agreed that central banks should move away from explicit forward guidance.
Lagarde said she prefers “framework guidance,” where the ECB explains its decision-making process without committing to a specific policy path. Warsh echoed that stance, arguing that central banks should focus on making the right decisions rather than relying on communication strategies that may limit flexibility.
