Federal Reserve Chairman Jerome Powell has announced that he will continue to serve on the central bank's board as 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 steady at 3.5%-3.75%. Powell cited the ongoing scrutiny and political tension as the primary reasons for his decision to stay, despite his initial intention to maintain a low profile.
He expressed concerns that the legal actions against the Fed are undermining the institution and jeopardizing its ability to implement monetary policy without political interference. Powell stated that he has "no choice" but to remain in his position due to the potential legal repercussions. The Fed's decision to hold interest rates was widely anticipated, but the dissenting votes from three Governors drew attention. According to macro analyst Matt Mena, the Fed's decision to keep rates steady was not surprising, but the dissenters' call for a strike on easing guidance had a significant impact on the market.
The hawkish tone affected risk assets, with bitcoin slipping below the $75,000 support level. The focus has now shifted to potential policy changes, with markets potentially pricing in a pivot that favors rate cuts and the passage of the CLARITY Act.
If momentum returns, the path to $85,000-$90,000 appears to be a viable option.