Fed Chair Jerome Powell Stays Tight-Lipped on Monetary Policy in Latest Meeting

Fed Chair Jerome Powell sidestepped questions on monetary policy at a conference focused on banking regulation, offering no hints on the central bank’s next moves. Speaking at the Fed’s banking regulation conference today, Powell welcomed feedback on improving capital rules but remained tight-lipped on the central bank’s future policy direction.

Fed Chair Avoids Monetary Policy Comments

Reportedly, Fed Chair Jerome Powell declined to comment on the central bank’s monetary policy and interest rate decisions in his latest meeting. According to the Federal Reserve’s official post, Powell’s opening remarks included discussions on the U.S. bank capital framework, its components, and the importance of effective supervision. The Fed Chair noted,

A great benefit of this conference is the chance to consider all elements of the capital framework in concert, rather than look at each in isolation. We need to ensure that all the different pieces of the capital framework work together effectively. Doing so will help maintain a safe, sound, and efficient banking system for the benefit of the people we serve.

Interestingly, Powell’s opening remarks fell short of crypto market expectations. Given the meeting’s timing amid escalating tensions between Powell and Trump, some anticipated a statement on potential resignation ahead of the Fed Chair’s speech today. Jerome Powell’s comments were silent on both his future at the Fed and potential interest rate cuts, potentially affecting the crypto market.

Previously, President Donald Trump has warned of firing the Fed Chair, citing his failure to lower the interest rate. The latest meeting and Powell’s silence on monetary policy may further strain relations between Trump and Powell.

Fed Rate Decision Looms

Despite White House pressure to cut interest rates, markets and experts believe the Federal Reserve is unlikely to make a dovish move anytime soon. Since December, the FOMC has maintained the federal funds target rate at 4.25%-4.50%, with the most recent decision in June also keeping rates steady, citing inflation and tariff concerns.

Interestingly, according to CME Group’s FedWatch, traders see a 60% chance of a 25-bps interest rate cut in September. However, there’s only a 5% chance for the Fed to cut rates in late July. Commercia Bank Chief Economist Bill Adams says,

The Fed is set to hold rates steady at their decision this month; the unemployment rate edged lower in June, which they will see as evidence that they can afford to wait to see how tariffs and tax cuts play out before making rate decisions in reaction to them. However, if June’s inflation trends hold, the Fed will likely be able to cut interest rates later in 2025.

Meanwhile, Fed Governor Christopher Waller recently advocated for an interest rate cut at the upcoming meeting. However, his fellow governors are unlikely to agree with him, and he will probably be outvoted. According to BofA Securities Senior Economist Aditya Bhave, the majority of the Fed is becoming less inclined to cut rates in September compared to their stance in June. Bhave notes that while one or two rate cuts after May seem feasible, achieving more significant cuts will be difficult due to committee dynamics.