Federal Reserve Chair Jerome Powell has announced that he will remain on the central bank's board as Governor after his term concludes in May. This decision was disclosed during a press conference that followed the Fed's decision to keep interest rates steady at 3.5%-3.75%. Powell expressed concerns over ongoing legal challenges to the central bank, stating that these challenges have compelled him to stay, despite his intention to maintain a low profile. Powell voiced his apprehension that these attacks are undermining the institution and jeopardizing its ability to implement monetary policy without political interference.
"I worry that these attacks are battering the institution and putting at risk the thing that really matters to the public, which is the ability to conduct monetary policy without taking into consideration political factors," he stated. The conclusion of the Trump administration's criminal investigation into Powell left the possibility of revisiting the case. Jeanine Pirro, the U.S.
attorney for the District of Columbia, indicated that the matter would remain under review by the Fed's inspector general and cautioned that prosecutors could reopen it if new evidence emerged. Subsequent remarks from President Donald Trump and his aides heightened concerns that Powell might still face legal pressure. Powell stated that, despite his desire to leave, he had "no choice" but to remain in his position.
The Fed's decision to maintain interest rates was anticipated, but the dissent from three Governors was notable, according to 21shares macro analyst Matt Mena. "The Fed's decision to keep rates steady wasn't surprising, but the three dissenters calling for a strike on any easing guidance had a significant impact on the market's expectations," Mena observed. The hawkish tone 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 also shifted to potential policy changes in the future.
"Markets may begin to anticipate a pivot favoring rate cuts, and more importantly, the imminent passage of the CLARITY Act," Mena said, adding that if momentum returns, "the path to $85,000–$90,000 appears to be a viable option."