Federal Reserve Chair Jerome Powell has announced his intention to continue serving on the central bank's board as Governor after his term concludes in May. This decision was disclosed during a press conference that followed the Fed's choice to keep interest rates steady at 3.5%-3.75%. Powell expressed concerns over the legal challenges facing the central bank, stating that these are forcing him to remain, despite his desire to adopt a lower profile. "The relentless attacks on the institution jeopardize its ability to implement monetary policy without political interference, which is what truly matters to the public," Powell stated.
The conclusion of the criminal investigation into Powell by the Trump administration, coupled with subsequent statements from President Trump and his aides, has raised the prospect of continued legal pressure. Powell emphasized that he has "no choice" but to stay on. 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 surprise was not the Fed's decision to hold rates steady, but the three dissenters advocating for a tougher stance on easing guidance, which has poured cold water on the market's expectations of a pivot," Mena observed. The hawkish tone has 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. "The markets may start to anticipate a shift in policy that favors rate cuts, particularly with the impending passage of the CLARITY Act," Mena noted, adding that if momentum returns, "the path to $85,000-$90,000 appears achievable."