XRP has come under renewed selling pressure after Federal Reserve Chair Kevin Warsh delivered a notably hawkish message on inflation during his first Jackson Hole speech.
The cryptocurrency dropped to around $1.38 on Friday. The cryptocurrency is down roughly 5% over the past 24 hours, according to CoinGecko data. The Ripple-linked cryptocurrency had been trading as high as $1.47 before reversing lower.
Market participants are now pricing in the possibility of another interest rate hike.
Warsh’s hawkish comments
Warsh has confirmed that the Federal Reserve continues to stick to its 2% inflation target. He argued that price pressures remain elevated.
The Fed chair has noted that 54% of PCE inflation components had risen by more than 3% over the past 12 months.
“None of these measures are perfect, but they all tell a similar story: inflation is running above our 2 percent target,” Warsh said, according to CNBC.
The Fed chair also stressed that short-term interest rates remain the central bank’s primary tool for achieving its dual mandate. The Federal Reserve could consider raising rates as soon as its September meeting if inflation fails to improve.
Of course, this has negatively affected various risk assets, including cryptocurrencies. Higher interest rates tend to reduce the appeal of speculative assets.
The token remains substantially above its recent levels, with CoinGecko data showing a gain of roughly 39% over the past month.
The September Federal Reserve meeting is now likely to remain a key focus for crypto traders.
It remains to be seen whether or not Warsh’s inflation concerns will translate into a change in monetary policy.