Current Federal Reserve Chairman Jerome Powell will remain on the central bank’s board as governor after his term ends in May.
Speaking at a news conference Wednesday after the central bank’s decision to keep interest rates unchanged at 3.5% to 3.75%, Mr. Powell expressed concern about lawsuits against the central bank and said he intended to keep a “low profile” but that was causing him to stay.
“I’m concerned that these attacks are hurting financial institutions and putting at risk what really matters to the public: our ability to conduct monetary policy without considering political factors,” Powell said.
When President Donald Trump’s administration closed the criminal investigation against Powell, it left room for the case to be revisited. U.S. Attorney for the District of Columbia Jeanine Pirro said the matter remains under investigation by the Fed’s inspector general and warned that prosecutors could reopen the investigation if new facts come to light.
The statement, along with subsequent statements from President Donald Trump and his aides, raised concerns that Powell could face continued legal pressure. Powell said he had “no choice” but to stay even if he wanted to leave.
Fed withdrawal rate remains unchanged
Matt Mena, a macro analyst at 21Shares, said the Fed’s decision to keep interest rates on hold was as expected, but the opposition from the three governors stood out. “The Fed’s decision to hold interest rates unchanged was not shocking, but the three opponents who called for a strike against any easing guidance threw a bucket of ice at the market’s core party,” Mena said. Bitcoin fell below the $75,000 support mark as traders braced for a retest of the $73,000 level, with a hawkish tone weighing on risk assets.
The focus has also shifted to possible future policy changes. “Markets may start pricing in (Kevin) Warsh’s change in direction in favor of rate cuts and, more importantly, the impending passage of the Clarity Act,” Mena said, adding that if momentum returns, “the path to $85,000 to $90,000 looks clear.”
