BroadChain News, April 27, 07:06, according to BeInCrypto, Jerome Powell will host his final FOMC press conference as Fed Chair on Wednesday, concluding his eight-year tenure at the helm of the Federal Reserve. The current interest rate remains unchanged at 3.50% to 3.75%, while the overall inflation rate has rebounded to 3.3%. His successor, Kevin Warsh, will take over a central bank laden with unfinished business: an oil-driven CPI surge, a $6.7 trillion balance sheet, and a crypto market that has learned to rely on Fed liquidity for survival.
Powell's tenure has been a mixed bag. His supporters argue that in March 2020, the Fed slashed rates to zero within three weeks, restarted asset purchases, and established nine emergency lending facilities. This wave of liquidity saved the markets and helped propel Bitcoin from around $5,000 to a peak of $69,000 in November 2021. Subsequently, Powell implemented the most aggressive tightening cycle since Volcker, raising rates from zero to 5.5% without triggering a deep recession. In late 2024, at the DealBook Summit, he described Bitcoin as "like gold, but virtual," a statement that pushed BTC above $103,000 that day.
Critics, however, focus on his misjudgment of "transitory inflation" in 2021. Powell did not begin raising rates until March 2022, when CPI had already exceeded 7%. Warsh called this a "fatal policy error," claiming it allowed inflation to take root in the economy. The delayed rate hikes forced 11 increases over 16 months, a pace that caught regional banks off guard—Silicon Valley Bank, Signature Bank, and First Republic Bank collapsed in March 2023, precisely due to losses on long-term Treasury holdings. Communication missteps further exacerbated the damage, with forward guidance frequently shifting between 2022 and 2023, eroding traders' confidence in the Summary of Economic Projections to multi-year lows.
The legacy Powell leaves for Warsh is complex: he inherited calm waters from Yellen (rates at 1.5%, inflation near the 2% target) but navigated through pandemic shutdowns, the largest balance sheet in history, the worst inflation since 1981, and the collapse of three regional banks in ten days. Warsh will face an oil-driven CPI surge, the challenge of shrinking a $6.7 trillion balance sheet, and a crypto market that has proven deeply intertwined with Fed liquidity.