The U.S. stock market and crypto investors face a pivotal moment as Kevin Warsh chairs his first Federal Open Market Committee (FOMC) meeting on Wednesday. A striking historical pattern — every new Federal Reserve Chair has seen the S&P 500 drop during their first 90 days in office — now commands Wall Street’s attention. Over nearly a century and across twelve different leaders, the average drawdown has been 12%, with the steepest under Alan Greenspan (down 33%) and the mildest under Ben Bernanke (down 2%). This trend, highlighted by analysts, places Warsh under immediate scrutiny as digital asset markets hang in the balance.
Bitget CEO Gracy Chen described the setup as “genuinely difficult,” citing sticky inflation, White House pressure for easier liquidity, and an unusually divided Fed. She emphasized that crypto now trades as a cross-asset class, reacting to the same macro question: where liquidity goes next. A hawkish tone from Warsh could strengthen the dollar and pressure gold and risk assets, including Bitcoin, while a dovish signal might spark a relief rally — though markets would quickly question whether easing is justified with still-high inflation. Bitcoin remains one of the worst-performing major assets in 2026, down 27% year-to-date even as the S&P 500 gains 9%, according to data from Charlie Bilello.
Market sentiment is mixed. XWIN Research suggests Warsh may prioritize balance sheet reduction (quantitative tightening) over rate cuts, potentially squeezing risk assets. Investor Ran Neuner is “mega bullish,” arguing any signal of a non-hiking path could boost risk assets if inflation expectations ease. Others, like analyst HaxKai, warn that Bitcoin has historically dropped after most FOMC meetings and that the recent rally from $59,000 stalled near $67,000, leaving room for a pullback. At press time, Bitcoin traded around $65,000, down 2% on the day but up nearly 6% over the past week.
