Federal Reserve Chair Jerome Powell has announced his intention to remain 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 that ongoing legal challenges and political tension are compromising the institution and its ability to implement monetary policy without political influence. "I am worried that these attacks are weakening the institution and jeopardizing its capacity to conduct monetary policy without considering political factors," Powell stated.
Despite his desire to adopt a low profile, Powell feels compelled to stay on due to the potential for renewed legal pressure. The decision to leave interest 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 three dissenters' call for a more assertive stance threw cold water on the market's expectations of a pivot." The hawkish tone has had a negative impact on risk assets, with bitcoin slipping below the $75,000 support level. Attention is now focused on potential future policy changes, with Mena suggesting that markets may begin to factor in the possibility of rate cuts and the passage of the CLARITY Act, which could potentially pave the way for a price increase to $85,000-$90,000.