Federal Reserve Chair 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 maintain interest rates at 3.5%-3.75%. Powell expressed concerns that the ongoing legal pressure and political tension could undermine the institution and its ability to conduct monetary policy without political influence. Powell stated, "The ongoing attacks on the central bank are eroding its foundation and jeopardizing its capacity to implement monetary policy without considering political factors, which is of utmost importance to the public." The decision to keep interest rates steady was 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 halt on easing guidance poured cold water on the market's expectations of a pivot." 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 has shifted to potential policy changes in the future.
Mena noted, "The market may start to factor in a potential pivot by Kevin Warsh that favors rate cuts, and more importantly, the imminent passage of the CLARITY Act." He added that if momentum returns, "the path to $85,000-$90,000 appears to be a clear possibility."