Jerome Powell, the current Chair of the Federal Reserve, has confirmed that he will continue to serve on the central bank's board as a Governor once his term comes to an end in May. This announcement was made during a press conference that followed the Fed's decision to maintain interest rates at 3.5%-3.75%. Powell expressed concerns about the impact of legal challenges and political tensions on the institution, stating that these factors have compelled him to remain, despite his intention to adopt a lower profile.
"The relentless attacks on the Fed 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 interest rates unchanged was widely anticipated, but the dissent from three Governors was notable, according to macro analyst Matt Mena. "The surprise was not the Fed's decision to hold rates steady, but the strong dissent from three Governors who advocated for a tougher stance, which poured cold water on the market's expectations of a pivot," 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 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 could lead to rate cuts, as well as 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."