What to know : Jerome Powell said he will remain on the Federal Reserve Board as a governor after his term as chair ends in May, despite his desire to keep a low profile. Powell said he is staying in part because he fears legal and political attacks are undermining the Fed’s independence and its ability to conduct monetary policy free of political influence. Although the Trump administration suspended its criminal investigation into Powell, officials left open the possibility of reopening the case, contributing to concerns that he could still face legal pressure.
Current Federal Reserve chair Jerome Powell will continue to stay on the central bank's board as Governor after his term ends in May.
Speaking at a press conference following the central bank's decision to hold interest rates steady at 3.5%-3.75% on Wednesday, Powell voiced concerns about the legal action against the central bank, saying it is causing him to stay, even though he plans to keep a "low profile."
"I worry that these attacks are battering the institution and putting at risk the thing that really matters to the public, which is the ability to conduct monetary policy without taking into consideration political factors,” Powell said.
When the administration of President Donald Trump closed its criminal investigation into Powell, it left room to revisit the case. Jeanine Pirro, the U.S. attorney for the District of Columbia, said the matter would stay under review by the Fed’s inspector general and warned prosecutors could reopen it if new facts emerged.
That statement, along with later remarks from President Donald Trump and his aides, raised concern that Powell could still face legal pressure. Powell said even though he wanted to leave, he had "no choice" but to stay.
Fed leave rates unchanged
The Fed’s rate hold came as expected, but the dissent from three Governors stood out, according to 21shares macro analyst Matt Mena. “The Fed’s decision to keep rates steady wasn't the shocker, but those three dissenters calling for a strike on any easing guidance threw a bucket of ice on the market’s pivot party," Mena said. The hawkish tone weighed on risk assets, with bitcoin slipping under the $75,000 support mark as traders brace for a retest of the $73,000 level.
Focus has also shifted to potential policy changes ahead. “Markets may begin to price a [Kevin] Warsh pivot that favors rate cuts, and more importantly, the imminent passage of the CLARITY Act,” Mena said, adding that if momentum returns, “the path to $85,000–$90,000 looks like a clear shot.”
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