Jerome Powell is set to lead his final FOMC press conference this Wednesday, closing an eight-year chapter as Chair of the Federal Reserve. He leaves office with interest rates held between 3.50% and 3.75%, while headline inflation has returned to 3.3%.
His successor, Kevin Warsh, selected by Donald Trump, will take control of a central bank facing several unresolved challenges. These include rising CPI pressures driven by oil prices, a $6.7 trillion balance sheet, and a crypto market that remains highly sensitive to Federal Reserve liquidity decisions.
When Janet Yellen handed leadership to Powell in February 2018, conditions were relatively calm. Rates were near 1.5%, inflation was close to the 2% target, and the Fed had already begun reducing its balance sheet in a measured way.
Powell entered the role from a legal and private equity background rather than academic economics. He initially continued gradual rate hikes in 2018 before shifting course due to trade war risks.
Yellen’s four-year term avoided recession and major disruption. Powell’s eight years, however, included a pandemic shutdown, the largest balance sheet expansion in Fed history, the worst inflation since 1981, and multiple regional bank collapses.
Powell’s strongest moment is often considered March 2020. During the pandemic crisis, the Fed quickly cut rates to zero, restarted asset purchases, and launched emergency lending facilities within weeks.
That aggressive liquidity response stabilized financial markets and helped fuel a major recovery in risk assets. Bitcoin surged from around $5,000 in March 2020 to over $69,000 in late 2021 as the Fed’s balance sheet expanded toward $9 trillion.
Another achievement was guiding the most aggressive tightening cycle since Paul Volcker without causing a deep recession. Rates moved from near zero to 5.5%, yet the labor market avoided collapse.
Later, Powell also softened his tone toward digital assets, famously comparing Bitcoin to “virtual gold,” a statement that boosted market optimism.
Powell’s most criticized mistake was describing inflation in 2021 as “transitory.” The Fed waited until March 2022 to begin hiking rates, even as CPI rose above 7%.
That delay forced the central bank into 11 rate hikes in only 16 months. The rapid pace of tightening exposed weaknesses in regional banks, contributing to the failures of Silicon Valley Bank, Signature Bank, and First Republic in 2023.
Communication problems also hurt confidence. Forward guidance became less predictable, and trust in Fed projections weakened among traders and investors.
Warsh steps into a Federal Reserve that remains restrictive. Rates have stayed unchanged for three consecutive meetings, and recent projections suggest only one rate cut in 2026 and another in 2027.
Inflation risks are also returning. CPI rose to 3.3% in March after higher gasoline prices linked to geopolitical tensions.
Warsh has promised a different approach. He supports a leaner Fed balance sheet and believes a smaller central bank footprint could help lower rates, control inflation, and strengthen growth.
These signals suggest faster quantitative tightening rather than immediate rate cuts.
Crypto traders face a mixed outlook. Warsh appears more hawkish on inflation than Powell, but more supportive of digital assets.
He has described Bitcoin as a sustainable store of value, rejected the idea of a retail central bank digital currency, and acknowledged that crypto is already part of the U.S. financial system.
However, tighter monetary policy could pressure Bitcoin in the short term. Over time, a stronger anti-inflation stance may also increase demand for non-sovereign assets like BTC.
Powell’s final press conference will be closely analyzed for:
If Powell fully steps aside in May, the next FOMC meeting would mark the beginning of the Warsh era.
Navigate the trading markets and Discover a world of opportunities.
Bullwaves is a trading name of Equitex Capital Limited (Registration No. 8434948-1), a company authorized and regulated by the Financial Services Authority (the "FSA", licence no. SD185) with legal registered address in CT House, office number 9A, Providence, Mahe, Seychelles and physical address in Office No. Al9C, Providence Complex, Providence, Mahe, Seychelles.
ETX Services Limited with company registration number HE455407, a company registered in Cyprus with registered address Archiepiskopou Makariou lll 160, 3026 Limassol is appointed as Independent Representative and Distributor.
Risk Disclaimer:
Over-the-counter derivatives are complex instruments and come with a high risk of losing your initial capital rapidly due to leverage. You should consider whether you understand how over-the-counter derivatives work and whether you can afford to take the high level of risk to your capital. Investing in over-the-counter derivatives carries significant risks and is not suitable for all investors.
When acquiring our derivative products you have no entitlement, right or obligation to the underlying financial asset. Equitex is not a financial advisor and all services are provided on an execution only basis. Information is of a general nature only and does not consider your financial objectives, needs or personal circumstances. Important legal documents in relation to our products and services are available on our website. You should read and understand these documents before applying for any Bullwaves products or services and obtain independent professional advice as necessary.
Regional Restrictions:
The information or services described on this website is not directed at or offered to residents of Belgium, Israel, Iran, Maldives, North Korea, United States, Afghanistan, Belarus, Central African Republic, China, Iran, Russia, Cuba, Libya, Nicaragua, Palestinian Authority/Gaza/West Bank, Venezuela and to jurisdictions on the FATF and EU/UN sanctions lists or any other person in any jurisdiction where such distribution or use would be contrary to local laws or regulations. For more information please contact our support. Clients who onboarded via www.bullwaves.com can contact our support team at support@bullwaves.com.For complaints please email us at compliance@bullwaves.com
For complaints please email us at compliance@bullwaves.com