Federal Reserve Chairman Jerome Powell has announced his decision to continue serving on the central bank's board as Governor after his term concludes in May. This revelation came during a press conference after the Fed opted to keep interest rates steady at 3.5%-3.75%. Powell expressed concerns over ongoing legal challenges against the central bank, stating that these challenges are forcing him to remain in his position despite his initial intention to adopt a lower profile. "I am worried that these attacks are undermining the institution and jeopardizing its ability to implement monetary policy without being swayed by political considerations," Powell stated.
The decision to keep rates unchanged was anticipated, but the dissent from three Governors was notable, according to macro analyst Matt Mena. "The Fed's decision to hold rates steady was not surprising, but the dissenting votes calling for a more aggressive stance caught the market off guard, pouring cold water on the expectations of a policy 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 mark. Attention is now focused on potential policy changes in the future. "The market may start to factor in the possibility of a pivot under Kevin Warsh that favors rate cuts, and more importantly, the impending 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."