Federal Reserve Chair Jerome Powell has announced his decision to continue serving on the central bank's board as a Governor after his term concludes in May. This revelation came during a press conference held after the Fed opted to keep interest rates steady at 3.5%-3.75% on Wednesday. Powell expressed concerns that ongoing legal challenges and political tensions are undermining the institution, forcing him to remain in his position despite his intention to maintain a low profile. Powell stated, "I am worried that these attacks are damaging the institution and jeopardizing the public's ability to implement monetary policy without political interference." His decision to stay on comes after the Trump administration closed a criminal investigation into him, leaving the door open for potential future action.
U.S. Attorney Jeanine Pirro indicated that the matter would remain under review and could be reopened if new evidence emerges. The Fed's decision to hold interest rates steady was anticipated, but the dissent from three Governors was notable, according to 21shares macro analyst Matt Mena.
Mena commented, "The surprise was not the Fed's decision to maintain rates, but the three dissenters advocating against easing guidance, which poured cold water on the market's expectations of a pivot." 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. Attention has shifted to potential policy changes on the horizon.
Mena noted, "Markets may start to factor in the possibility of a pivot favoring rate cuts, particularly with the impending passage of the CLARITY Act." He added that if momentum returns, "the path to $85,000-$90,000 appears to be a viable option."