Jerome Powell, the current Chair of the Federal Reserve, has announced that he will continue to serve on the central bank's board as a Governor after his term concludes in May. During a press conference that followed the Fed's decision to keep interest rates steady at 3.5%-3.75%, Powell expressed concerns that the ongoing legal challenges and political tensions are forcing him to remain in his position, despite his desire to adopt a lower profile.
"My primary concern is that these ongoing attacks are eroding the institution and jeopardizing its ability to implement monetary policy without being swayed by political considerations," Powell stated. The decision to keep Powell's case under review by the Fed's inspector general, as well as remarks made by President Donald Trump and his aides, have raised concerns that Powell may still face legal challenges. According to Powell, he feels compelled to stay on, despite his initial intention to leave.
The Fed's decision to maintain interest rates was widely anticipated, but the dissenting opinions of three Governors caught attention, according to macro analyst Matt Mena of 21shares. "The Fed's decision to hold rates steady was not unexpected, but the fact that three Governors dissented and advocated for a more hawkish stance threw a curveball into the market's expectations of a pivot," Mena noted.
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 now shifted to potential policy changes on the horizon. "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 picks up, "the path to $85,000-$90,000 appears to be a viable option."