If the Fed trusts this single 2.2% metric, Bitcoin could break $65.3k and ignite a path to $68k
Bitcoin is trading near $63,000, with rate markets assigning roughly 66% odds to a September Federal Reserve hike, under a policy framework Kevin Warsh has left partly hidden.
The Fed chair has defined his reaction function around “underlying inflation,” then declined to disclose how he weighs the indicators that produce that judgment.
The official dashboard spans 1.5 percentage points: headline PCE runs at 3.7%, core PCE at 3.3%, the Atlanta Fed’s sticky-price CPI at 2.8%, Cleveland Fed 10-year expected inflation at 2.43%, and the Dallas Fed’s trimmed-mean PCE at 2.2%.
One economy supplies readings from nearly twice the Fed’s 2% goal to barely above it.
| Inflation measure | Latest reading | Gap from 2% target | What it tells Warsh |
|---|---|---|---|
| Headline PCE | 3.7% | +1.7 pp | Inflation still far above target |
| Core PCE | 3.3% | +1.3 pp | Underlying pressure remains elevated |
| Atlanta Fed sticky-price CPI | 2.8% | +0.8 pp | Persistent inflation is cooling, but not at target |
| Cleveland Fed 10-year expected inflation | 2.43% | +0.43 pp | Long-term expectations remain contained |
| Dallas Fed trimmed-mean PCE | 2.2% | +0.2 pp | Broad inflation is close to target |
Warsh told reporters that the Fed’s January strategy document keeps PCE as its formal objective. He invoked Goodhart’s Law, said the central bank could revisit its strategy in January 2027, and described a broader data project that aims to “separate the noise from the signal.”
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