Federal Reserve Chair Jerome Powell has announced that he will continue to serve on the central bank's board as a Governor after his term expires in May. This decision was revealed during a press conference that followed the Fed's decision to keep interest rates unchanged at 3.5%-3.75%. Powell expressed concerns over the ongoing legal challenges facing the central bank, stating that these attacks threaten the institution's ability to implement monetary policy without political influence.
"I am worried that these attacks are undermining the institution and jeopardizing its capacity to conduct monetary policy without considering political factors," Powell stated. The decision to keep interest rates steady was widely anticipated, but the dissent from three Governors was notable, according to macro analyst Matt Mena. "The surprise was not the Fed's decision to keep rates steady, but rather the three dissenting voices calling for a more hawkish stance, which poured cold water on the market's expectations of a pivot," Mena observed.
The hawkish tone had a negative impact on risk assets, with bitcoin prices slipping below the $75,000 support level as traders prepare for a potential retest of the $73,000 level. Attention is now focused on potential future policy changes.
"The market may start to factor in the possibility of a pivot under Kevin Warsh that favors rate cuts, as well as the impending passage of the CLARITY Act," Mena noted, adding that if momentum returns, "the path to $85,000-$90,000 appears to be a viable option."