Bitcoin moved closer to the $60,000 level after recovering from an intraday low below $58,000. The rebound followed comments from Federal Reserve Chair Kevin Warsh, who declined to provide guidance on the Fed’s July interest rate decision.
The Bitcoin price gained almost 2% during the session as investors assessed the outlook for inflation, interest rates, and future Federal Reserve policy.
Bitcoin Price Recovers Toward $60,000
Bitcoin was trading near $59,700 after briefly falling below the important $58,000 level earlier in the day, according to TradingView data.
The recovery came after Warsh participated in a panel discussion at the European Central Bank Forum. During the event, he refused to predict whether the Federal Reserve would change interest rates at its July Federal Open Market Committee meeting.
Instead, Warsh emphasized that future monetary policy decisions would depend on incoming economic data.
His comments supported his opposition to forward guidance, which involves giving markets indications about future interest rate decisions. Warsh has reportedly provided fewer policy signals since his first FOMC meeting.
Markets Expect the Fed to Hold Rates in July
Investors currently expect the Federal Reserve to leave interest rates unchanged at the July meeting.
CME FedWatch data showed a 72.7% probability that rates would remain at their current level. This expectation helped ease some of the pressure on Bitcoin and the wider cryptocurrency market.
Higher interest rates are generally considered negative for risk assets because they increase borrowing costs and make interest-bearing investments more attractive.
As a result, signs that the Fed may avoid an immediate rate increase can support Bitcoin and other cryptocurrencies.
Warsh Says Inflation Risks Have Eased
Inflation remains a major concern for financial markets, particularly because of the economic impact of the conflict between the United States and Iran.
However, Warsh said inflation expectations had declined during the first four weeks of the period. He also suggested that inflation-related risks had become less severe.
These comments were viewed positively by Bitcoin traders. Lower inflation risks could reduce the need for aggressive interest rate increases.
Warsh also reaffirmed the Federal Reserve’s commitment to returning inflation to its long-term target of 2%.
Investors Still Expect a Rate Hike This Year
Despite the more encouraging inflation outlook, some market participants continue to expect the Federal Reserve to increase interest rates before the end of the year.
Polymarket data indicated a 54% probability of at least one Fed rate hike by year-end.
The possibility of tighter monetary policy continues to place pressure on Bitcoin. A rate increase could reduce market liquidity and weaken investor demand for volatile assets.
Concerns that Strategy could sell as much as $1.25 billion worth of Bitcoin have also added to uncertainty in the cryptocurrency market.
Morgan Stanley Predicts Rates Will Remain Stable
Morgan Stanley recently forecast that the Federal Reserve could keep interest rates unchanged throughout the year.
However, the bank warned that rate increases could return if inflation remains elevated or if the unemployment rate falls further.
Bitcoin’s next major move may therefore depend on inflation data, employment figures, and signals from future Federal Reserve meetings.
For now, the cryptocurrency has recovered toward $60,000, although uncertainty surrounding interest rates continues to influence market sentiment.
