Bitcoin is entering one of its most consequential trading windows of the year after a hotter-than-expected U.S. inflation reading interrupted a sharp rally above $81,000 and pushed the asset down by roughly $3,000 within hours. The market is now centered on a dense 48-hour stretch that combines macro data, a massive $6.4 billion Bitcoin options expiry on Deribit, Nvidia’s second-quarter earnings release, and the first major Jackson Hole speech from Federal Reserve Chair Kevin Warsh, who took office in May. July PCE inflation came in at 3.7% year over year, above the 3.6% consensus, while core PCE matched expectations at 3.3%. A second estimate of second-quarter GDP showed annualized growth of 1.5%, with consumer spending revised higher. Traders are also watching the options market’s max pain level near $78,000, CME FedWatch pricing for the Sept. 16 rate decision, and ETF flows after U.S. spot Bitcoin and Ether funds drew $2.6 billion last week, the strongest weekly showing since October 2025. According to the report, those cross-currents could shape Bitcoin’s next move in the days ahead.

CME FedWatch data shows the probability that the Federal Reserve raises interest rates by 25 basis points at its September 16 FOMC meeting has climbed to 57%, which would take the target range to 3.75%-4%. The odds of holding the current 3.5%-3.75% band stand at 43%. The shift followed the August 28 Jackson Hole speech: the implied probability of a hike stood at 39.9% on August 21 and rose to 57% afterward, all but extinguishing bets on a September rate cut. Prediction markets are pricing similar outcomes. Polymarket shows a 52% probability of rates staying unchanged versus 48% for a hike, with trading volume above $66.6 million. Kalshi data point to the same 52%/48% split, on volume exceeding $23.8 million. Fed Chair Kevin Warsh said in his Jackson Hole remarks that the Fed remains committed to its 2% personal consumption expenditures (PCE) inflation target, describing the commitment as one of discipline rather than specific decisions. The latest readings show 12-month PCE inflation at 3.7% and the six-month figure at 4.1%.

WuBlockchain’s WhiteLine Daily highlighted four developments on Aug. 29. First, after Federal Reserve Chair Kevin Warsh spoke at the 2026 Jackson Hole global central banking symposium, market pricing for a September rate hike rose from about 35% the previous day to nearly 60%. Warsh said the Fed may still need to act if underlying inflation does not return to the 2% target quickly enough, while noting a 4.1% unemployment rate, financial conditions that are hard to call restrictive, and a 3.7% reading for the Fed’s preferred PCE inflation gauge. Second, Changxin Memory announced formal mass production of its next-generation LPDDR6 memory, with Xiaomi 18 Fold set to be the first device to carry it. Third, laser chip maker Yuanjie Technology reported strong first-half 2026 results, with data center revenue up 640.29% year over year to 774 million yuan, accounting for about 84% of total revenue. Fourth, OpenAI said it plans to end its direct model supply contract with AI coding tool Cursor on Nov. 12, while Reuters reported that Anthropic will increase Claude model and compute support for Cursor.

Federal Reserve Chair Kevin Warsh used his first Jackson Hole address since taking office to argue that forward guidance has outlived its usefulness in normal economic conditions and that monetary policy should return to discipline, data dependence, and restraint. Speaking on Aug. 28, Warsh said the Fed should not pre-commit to future rate decisions or let financial markets rely too heavily on central bank signaling. He warned that too much disclosure can blur, rather than clarify, the policy outlook. A major section of the speech focused on artificial intelligence. Warsh said AI may become a new factor of production and could reshape productivity, labor markets, and the distribution of returns across AI labs, chipmakers, energy producers, cloud firms, businesses, and consumers. He noted that annualized token sales at two leading AI labs had reportedly topped $100 billion, up more than 500% from a year earlier, though he said those questions would not drive current policy decisions. On the economy, Warsh said the labor market remains broadly consistent with full employment, citing a 4.1% unemployment rate and low jobless claims. Inflation, however, is still too high. He said the Fed’s preferred PCE inflation gauge stood at 3.7% year over year, with the 6-month change at 4.1%, and stressed that policymakers must be confident underlying inflation is moving toward 2% at a clear and sufficiently fast pace. Otherwise, he said, the Fed still has work to do.

Federal Reserve Chair Kevin Warsh told the Jackson Hole symposium that the central bank bears full responsibility for inflation running persistently above target over the past roughly 65 months. Market-based inflation expectations remain "well anchored," he said, but need close monitoring to prevent unanchoring. Warsh also flagged AI as a new factor in the economy and monetary policy, with two top AI labs generating over $100 billion in annualized token revenue. He described the labor market as stable with unemployment near 4.1%, while PCE inflation remains around 3.7%, well above the 2% goal.

Federal Reserve Chair Kevin Warsh is set to speak at the Jackson Hole central banking symposium, and markets are watching less for a simple hawkish-or-dovish label than for clues on how his remarks could reshape Treasury yields and U.S. equity valuations. The setup is tense: the S&P 500 has turned choppy after hitting a record high two weeks ago, the 10-year Treasury yield is hovering near 4.66%, and the 30-year yield briefly reached 5.34% last week, its highest level since the global financial crisis, before trading around 5.20% in Asian hours on Friday. At the same time, the Fed’s preferred PCE inflation gauge rose 3.7% year over year in July, still well above the 2% target, while markets see roughly a 34% chance of a 25-basis-point rate hike in September. According to the article, investors are most concerned not about outright hawkishness but about continued ambiguity. Some market participants at JPMorgan, Apollo Global Management and Morgan Stanley argue that if Warsh firmly defends the 2% inflation target and lays out a credible policy framework, long-dated Treasuries could rally rather than sell off. If he stays vague, long-end yields may remain the main pressure point for stocks.

Bitunix analysts said Federal Reserve Chair Warsh's first major speech at the Jackson Hole symposium is a credibility test, as July PCE inflation at 3.7% remains well above the 2% target and several Fed officials have revived September rate-hike expectations. The real question is not hike versus cut, but how the Fed establishes a clearer reaction function balancing inflation, employment, and growth. Pressures extend beyond prices: Treasury expanded long-dated bond buybacks may clash with the Fed's tightening of financial conditions, while the yen's move toward 160 and BOJ policy normalization are reshaping global capital flows. A hawkish tone may not lift long-end yields directly; the market needs to see whether Fed credibility can lower term premia. The key signal later today is whether Warsh can rebuild credible anti-inflation logic, keep the 2% target intact, and communicate clearly. Vague language may push markets to price fiscal and inflation risk into long bonds. With Iran tensions unresolved and Hormuz shipping and energy supply uncertain, Jackson Hole's real message depends on whether Warsh can convince markets the Fed still controls inflation and financial conditions.

Federal Reserve officials are sending mixed signals on inflation and the rate path ahead of Chair Warsh’s scheduled speech at the Jackson Hole symposium, according to Bloomberg. The main disagreement centers on whether current policy is restrictive enough to weigh on the economy. Kansas City Fed President Jeff Schmid said short-term rates may still be accommodative, suggesting the Fed still has more work to do. Cleveland Fed President Beth Hammack took a similar line, saying policy is not yet restrictive enough and should be tightened further if inflation is to return to 2% within a reasonable time frame. Others struck a more measured tone. Boston Fed President Susan Collins said current rates are “modestly restrictive,” while Chicago Fed President Austan Goolsbee said policymakers could keep watching incoming inflation data, though he would be concerned if services inflation stays elevated or starts rising again. July PCE inflation in the U.S. rose 3.7% year over year. Rate futures show markets are pricing in roughly a 36% chance of a September hike. The Fed left the federal funds rate unchanged at 3.5% to 3.75% in July, when three officials supported a rate increase. Warsh is set to speak at 22:00 Beijing time on Aug. 28.