Fed’s Hystery: Warsh Storms In, Bitcoin Scurfs Itself-Yikes!

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A sudden hawk has taken wing, perchering over the Fed’s hollow marsh.
The committee’s minutes, smoothed like a page from a waxed diary, brag of rate hikes as if the next word in the economy’s alphabet were a metallic bell.
Potent potions beyond the realm of ordinary policy are being considered.
And come the summer, what do we expect? A Warsh‑branded donkey rolling into the Board’s chambers, ready to re‑balance the scale as if it were a carpenter with a cursed trowel.

Indeed, the prospect of hawkish enforcement threatens to encircle Warsh before he has even stamped his boots in the sandy seafarer’s lane, riling the underground markets that forage low‑lying hopes in the crypto trenches.

A Committee Tilting Hawkish – Right Before a Leadership Change

On January 28, the FOMC spilled its nectar at a vote of 10‑2 to yawn on rates at 3.5%‑3.75%, while Governors Christopher Waller and Stephen Miran, dandling their dissent, suggested a quarter‑point cut as though bidding for a crumb in a pantry of infinite supply.

Yet the bulk of the committee stayed wing‑high. Several members warned that another loosening, amid already swollen inflation, would resemble a broken promise that the 2% target was still a distant mirage. The de facto majority demanded a “clear signal that disinflation is firmly back on track” before any goose‑egg of a cut could be served.

The most glaring moment was when a handful of officials urged that the post‑meeting communique echo potential “upward adjustments” to the fed funds rate-a slithered warning that hyperbolic hyperinflation may be in the off‑track jam.

Powell Out, Warsh In – And a Policy Collision Looms

Jerome Powell’s final bow at the helm is scheduled for May, following two remaining convocations. On January 30, Trump-dressed in a crisp “We’re Getting It Back” tee-announced that former Fed Governor Warsh would be his chosen successor.

Warsh, with a past of whining about low rates, perfectly matched the President’s echo chamber of cheap borrowing dreams. The White House, insisting that inflation had “cool and stable,” might as well have promised a snow‑free summer.

Yet the committee’s hawks perhaps would not allow a feather to flutter in the middle of the clangor. Out of the 12 voting members, only a few feathered greens detracted. The majority remained scalping inflation like a surgeon on a delicate soufflé.

Analysts whispered that the cohort’s hawkish chorus could haunt Warsh during confirmation and corner his initial tenure into a gray corridor where cuts are almost impossible.

If his appointment goes through, Warsh’s first meeting as chair would loom in June. Futures whisper a cut around that time, but the Fed’s beloved PCE Price Index may re‑accelerate like a dragon with a broken tail, putting any easing on the back‑of‑the‑queue.

Asian Liquidity Returns, Amplifying the Selloff

Bitcoin, that silver‑backed swallow, began slumping soon after the minutes were dropped into U.S. afternoon trading. It hemorrhaged from currently hovering at about $68,300 to below $66,500 by early Asian hours, a 1.6% plunge over twenty‑four hours. The drop’s timing-when Asian traders woken from Lunar New Year’s restful torpor-brought about a frantic bang that pressed Bitcoin deeper into the abyss.

Rising volumes and turnover magnified the move lower. U.S.-Iran tensions escalated, feeding panic, while oil prices soared more than 4%, adding another layer of dread to risk‑laden crypto seas.

Coinbase CEO Brian Armstrong, sounding the post‑script of “psychological” decline, declared that his firm was buyringing shares and amassing Bitcoin at lower prices-it was not the end, just a pause, a refraction in the world’s kaleidoscope.

What Comes Next

The Fed’s scheduled March 17‑18 meeting will continue to see little change; a cut there is effectively a distant twin. The next frontier sits in the glare of June.

Beyond timing lies a deeper quandary. Can Warsh wrestle a deep‑divided committee into cutting while inflation stubbornly clings to the wallet of the tradable? The hawks have already lived in casting stone, and altering that is no small pastry.

Bitcoin’s fortunes remain entangled in this chess game. The combination of hawkish Fed, fearful leadership handoff, and the boisterous re‑entry of Asian liquidity portend volatility reminiscent of a sly cat leaping onto a napping silver coin.

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2026-02-19 04:51