tl;dr
Federal Reserve Chairman Jerome Powell testified before a Senate Banking Committee, stating he is not in a rush to cut interest rates, despite President Trump's push for more intense cuts due to high inflation. Powell also expressed support for comprehensive stablecoin regulations and an end to anti...
Federal Reserve Chairman Jerome Powell testified before a Senate Banking Committee, stating he is not in a rush to cut interest rates, despite President Trump's push for more intense cuts due to high inflation. Powell also expressed support for comprehensive stablecoin regulations and an end to anti-crypto debanking campaigns.
His testimony suggests that cautious market response and institutional investor behavior may be influenced by future policy adjustments. While some in the industry desire higher rate cuts, Powell's statements were generally bullish. He emphasized the need for a balanced approach to interest rates, understanding their impact on the crypto market.
Powell also advocated for stablecoin regulation and opposed a US central bank digital currency, aligning with industry sentiment. Additionally, he expressed determination to combat debanking initiatives. This aligns with Congress's intensified investigations into Operation Choke Point 2.0 and the FDIC's release of documents on the subject.
Today, Federal Reserve Chairman Jerome Powell told a Senate Banking Committee that he’s in no rush to cut interest rates. President Trump has agitated for more intense cuts due to high inflation, but Powell remains unmoved. He also expressed his support for comprehensive new stablecoin regulations and an end to anti-crypto debanking campaigns. Although some in the industry wish for higher rate cuts, his statements were bullish overall.
Jerome Powell, Chairman of the Federal Reserve, testified before a Senate Banking Committee today. Powell has recently taken a favorable approach to the crypto market, and his comments touched on a few key areas.
Most pressingly, Powell is not interested in cutting US interest rates. The Federal Reserve cut US interest rates by 50 bps last September, and this had a bullish influence over the crypto market. However, aggressive cuts can have a negative impact, and he slowed the pace of future cuts in October. Today, despite President Trump’s inflation-related requests for substantial cuts, Powell said that the Fed “does not need to be in a hurry.”
However, institutional investors may delay moving funds into crypto until future policy adjustments provide clearer signals. This might result in a cautious market response. The institutional market already signaled this cautious mindset today, as Bitcoin ETFs saw the first weekly net outflow in 2025.
Powell also supports clearer guidelines for stablecoins, he concurs with the crypto industry’s hostility to a US CBDC.
Powell’s comments on a few topics seemed to generally align with industry opinion. In addition to slow rate cuts and stablecoin regulation, he also wants to combat Operation Choke Point 2.0 and other debanking initiatives. Congress is currently intensifying its investigations of Operation Choke Point 2.0, and the FDIC released a tranche of 175 documents on the subject. This overwhelming evidence has apparently convinced Powell, and he will use his influence at the Fed to fight further debanking efforts.