The Fed meeting on June 17 could be a turning point for the crypto market, although a rate cut should not be expected at it. Amid inflation of 4.2% and the risks of the collapse of peace between the US and Iran, the regulator will maintain a hawkish stance, but the first cut of the cycle is being prepared for December. Bitcoin under these conditions retains the potential to move toward $67,000.

This forecast was shared in a new video by blogger Coin22. He broke down the scenarios for the Fed's actions under the leadership of Kevin Warsh and the market's reaction to the upcoming meeting.

War, inflation, and the Fed's decision

According to the CPI report of June 10, inflation in the US rose to 4.2% — for the first time since May 2023. The difference is that back then the metric was falling, whereas now it is rising. The blogger names high oil prices as the main driver, which held above the level painful for the market amid the US war with Iran.

Coin22 is skeptical about the discussed deal to settle the conflict. According to him, the 14-point memorandum published by an Iranian agency looks more like a US capitulation than a victory: Iran retains its nuclear program, missile arsenal, and control over the Strait of Hormuz, gets $24 billion unfrozen and sanctions lifted, while the nuclear issue is effectively deferred to separate negotiations. For the markets, the signing will bring short-term positivity, but big capital, in his opinion, will sell into the rally.

The key factor is oil. The blogger emphasizes: if the Strait of Hormuz opens and prices fall, pressure on inflation will ease, and the situation will change radically.

Warsh's scenario and bitcoin's reaction

Kevin Warsh's first meeting as Fed chair, as the blogger expects, will pass without a rate cut — he puts the probability of a cut in June at 5%. A sharp easing with inflation above 4% would immediately turn Warsh into a "White House puppet" and trigger a rise in bond yields.

Source: BeInCrypto