Federal Reserve Chair Kevin Warsh has stated he is prepared to raise interest rates in September if inflation is higher than anticipated. Inflation in the US, currently at 3.5% in June 2026, remains well above the Fed’s 2% target. The cryptocurrency market, which often suffers when higher interest rates make borrowing difficult, has underperformed this year. July’s inflation figures could rise due to a recent spike in oil prices from the US-Iran conflict and President Trump’s latest tariffs. Core PCE inflation data, a key FOMC metric, also shows a potential increase to 3.36% in July.
Federal Reserve Chair Kevin Warsh has indicated he is prepared to raise interest rates in September if inflation is higher than anticipated. Higher interest rates make borrowing difficult, often causing investors to move funds from high-risk assets to safer havens.
Inflation in the US has been declining over recent months, falling to 3.5% in June 2026. However, it remains well above the Federal Reserve’s 2% target, which has kept the Fed from lowering rates despite President Trump’s repeated requests.
The cryptocurrency market has underperformed as a result of this high inflation and the lack of rate cuts. While the Fed expects July inflation numbers to further dip to 3.32%, several factors could push July figures higher.
A recent re-escalation in the US-Iran conflict led to a spike in oil prices last month. Higher oil prices often lead to higher Consumer Price Index figures.
President Trump’s recent tariff spree may also drive up inflation figures. Such a move could spell trouble for the cryptocurrency market.
Core Personal Consumption Expenditures data, one of the FOMC’s preferred inflation metrics, paints a similar story. Core PCE inflation in June came in at 3.33%, and data shows it could rise to 3.36% in July.
