XRP Price Drops 5% After Hawkish Fed Warning

XRP faced renewed selling pressure on Friday after Federal Reserve Chair Kevin Warsh delivered a hawkish message on inflation during his first Jackson Hole speech, raising concerns that U.S. interest rates could remain elevated or even move higher.

The Ripple-linked cryptocurrency fell to around $1.38, marking a decline of roughly 5% over the previous 24 hours, according to CoinGecko data. XRP had earlier traded as high as $1.47 before reversing course as investors reacted to Warsh’s comments and reassessed the outlook for Federal Reserve monetary policy.

Warsh reaffirmed the central bank’s commitment to its 2% inflation target, emphasizing that price pressures across the U.S. economy remain too high. He pointed to data showing that 54% of Personal Consumption Expenditures (PCE) inflation components increased 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 Federal Reserve’s primary instrument for fulfilling its dual mandate. His remarks have increased speculation that policymakers could consider another interest rate hike, potentially as early as the September Fed meeting, if inflation does not show sufficient improvement.

The prospect of tighter monetary policy weighed on cryptocurrencies and other risk-sensitive assets. Higher interest rates typically increase borrowing costs and make safer yield-bearing investments more attractive, potentially reducing investor appetite for speculative assets such as XRP and other cryptocurrencies.

Despite Friday’s XRP price decline, the token remains significantly higher over a longer time frame. CoinGecko data shows XRP has gained approximately 39% during the past month, highlighting the strong rally that preceded the latest pullback.

Attention will now turn toward upcoming U.S. inflation data and the Federal Reserve’s September policy meeting. Crypto traders will be watching closely for signs that Warsh’s inflation concerns could translate into an actual rate hike, potentially creating additional volatility for XRP and the broader cryptocurrency market.