Federal Reserve Chair Jerome Powell has announced that he will continue to serve on the central bank's board as Governor after his term concludes in May. During a press conference after the Fed decided to keep interest rates steady at 3.5%-3.75%, Powell expressed concerns about the ongoing legal challenges facing the central bank, stating that they have forced him to remain in his position despite his desire to maintain a low profile. "The relentless attacks on the institution are undermining its ability to implement monetary policy without political interference, which is a critical concern for the public," Powell stated.
The decision to keep Powell's case under review by the Fed's inspector general, coupled with comments from President Donald Trump and his aides, has raised concerns that Powell may still face legal challenges. Powell emphasized that he has "no choice" but to stay on as Governor. As expected, the Fed decided to leave interest rates unchanged, but the dissent from three Governors was notable, according to macro analyst Matt Mena.
"The Fed's decision to hold rates steady was anticipated, but the three dissenters' call for a more aggressive stance caught the market off guard, pouring cold water on the expectations of a pivot," Mena said. 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. The focus has shifted to potential policy changes in the future. "The market may start to factor in the possibility of a pivot under Kevin Warsh that could lead to 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."