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 concludes in May. This decision was revealed during a press conference that followed the Fed's decision to maintain interest rates at 3.5%-3.75%. Powell expressed concerns that ongoing legal challenges and intense political tension have compelled him to remain in his position, despite his initial intention to adopt a lower profile.
Powell stated, "I am concerned that these attacks are undermining the institution and jeopardizing its ability to implement monetary policy without being swayed by political considerations. The recent closure of the criminal investigation into Powell by the Trump administration has left the door open for potential revisitation. U.S.
Attorney Jeanine Pirro indicated that the matter would remain under review by the Fed's inspector general, warning that prosecutors could reopen the case if new evidence emerges. Subsequent remarks by President Trump and his aides have heightened concerns that Powell may still face legal pressure. As a result, Powell feels he has no choice but to stay on.
The Fed's decision to hold interest rates steady was widely anticipated, but the dissent from three Governors was notable, according to macro analyst Matt Mena. Mena commented, "The Fed's decision to maintain steady rates was not surprising, but the three dissenters' call for a strike against any easing guidance poured cold water on the market's expectations of a policy pivot. The hawkish tone has had a negative impact on risk assets, with bitcoin slipping below the $75,000 support level as traders prepare for a potential retest of the $73,000 level. Attention has shifted to potential policy changes on the horizon.
Mena noted, "Markets may begin to factor in the possibility of a pivot favoring rate cuts, particularly with the impending passage of the CLARITY Act. If momentum returns, the path to $85,000-$90,000 appears to be a viable option."