There was little new today emerging from the US Federal Reserve announcement as it decided to hold rates steady, matching market expectations. The Fed decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent.
The FOMC [Federal Open Market Committee] said that indicators show steady economic activity with solid labor markets and somewhat elevated inflation.
The Committee noted that its dual mandate was roughly in balance as it seeks to lower inflation to 2% while seeing full employment in the economy.
Of course, the Committee said it was ready to act if things change.
During the press Q&A, Fed Chair Jerome Powell was asked several interesting questions as the Executive branch of the government is now under the leadership of President Donald Trump.
Asked about DEI initiatives and the Fed’s stance, Powell said they would adhere to Federal rules.
As crypto, or digital assets, are on the rise as President Trump has embraced digital asset innovation, one query pressed Powell on his opinion as to whether or not crypto should be viewed as having a place in a household’s portfolio. Powell said that deciding this was not really their place but indicated he thought Congressional action to create a bespoke framework for crypto made a lot of sense.
Powell also reflected on banks engaged in crypto services, declaring they (the Fed) do not want banks to terminate customers because of that. Next week, the Senate Banking Committee will hold a hearing on debanking – something that occurred when certain crypto firms saw their bank accounts closed due to crypto, allegedly due to regulatory pressure.
As President Trump enjoys making broad declarations on just about everything, like his recent statements on lowering interest rates, it will be interesting to watch how Chair Powell navigates the next few years and the Fed’s statutory independence,
