Jerome Powell will hold his final FOMC news conference on Wednesday, ending eight years at the helm of the Fed with interest rates frozen at 3.50 to 3.75 percent and headline inflation back at 3.3 percent.
His successor, Trump’s pick, Kevin Warsh, enters a corner office full of unfinished business, a rising CPI due to oil, a $6.7 trillion balance sheet, and a cryptocurrency market that has learned to live and die by Fed liquidity.
Powell v. Yellen: The inheritance gap
In February 2018, Janet Yellen gave Powell calm waters. Interest rates held near 1.5%, headline inflation met its 2% target, and the balance sheet was already shrinking by design.
Powell took his position as a former lawyer and private equity executive, not as an academic economist. He inherited a soft decline in progress and tried to continue it through gradual rises into 2018 before the trade war forced a turnaround.
relents for four years It produced almost no recessions or surprises. Powell’s eight years included a pandemic shutdown, the largest balance sheet in history, the worst inflation reading since 1981, and the bankruptcy of three regional banks within ten days.
Gains: From pandemic rescue to almost soft landing
Powell’s defenders point to March 2020 as his strongest hour. The Fed cut interest rates to zero, resumed asset purchases, and shut down nine emergency lending facilities in less than three weeks.
“Powell resisted some moderate hawkish resistance to the massive interest rate cut on March 15, 2020.” Highlight Economist Nick Temiros.
This wave of liquidity saved the markets and arguably saved Bitcoin’s first institutional cycle. Bitcoin (BTC) rose from around $5,000 in March 2020 to a November 2021 peak above $69,000. Track the expansion of the Fed’s balance sheet About 9 trillion dollars.
The second redemption arc came later. Powell has administered the most aggressive tightening course since then Paul VolckerAnd raising the interest rate from zero to 5.5% without causing a deep recession or collapse of the labor market.
By late 2024 he is too He reshaped the official tone of digital assets. At the DealBook Summit, Powell described Bitcoin as “like gold, except virtual,” a single sentence that helped push Bitcoin past $103,000 during the session.
“It’s just like gold, it’s just virtual,” Powell said. “People don’t use it as a means of payment, or as a store of value. It’s very volatile. It’s not a competitor to the dollar, it’s really a competitor to gold.”
Losses: Temporary inflation and bank concerns
The “provisional” invitation for 2021 is still drawing criticism. Powell waited until March 2022 to start rallying even as the Consumer Price Index (CPI) rose. Prints exceeded 7%A delay Warsh described as a “huge policy error.”
“Once inflation is allowed to take over the economy, it becomes more expensive and harder to bring down, so the fatal policy mistake of four or five years ago is still a legacy we are dealing with… We need a regime change in the conduct of policy.” male Kevin Warsh, testimony before the Senate Banking Committee, April 21
Subscribe to our YouTubeA channel to watch leaders and journalists provide expert insights
Late start He forced 11 spikes in 16 months. This pace has surprised regional lenders, such as Silicon Valley Bank, Signature Bank, and First Republic. It all failed in March 2023 After losses on long-term Treasuries.
“JAYPOW (Jerome Powell) may have broken the US banking system. In 2008 it was the portfolios of banks with bad credit – aka subprime. In 2023 it was the portfolios of banks with long-term bonds like UST and MBS??? If it goes down, remember March 20, big drop, bail out, then big raise! My body is ready,” He said Arthur Hayes in a post dated March 10, 2023.
Communication errors deepened the damage. Forward guidance has become a moving target during 2022 and 2023, and traders’ confidence in the summary of economic forecasts has fallen to multi-year lows.
Political bruising followed in 2025, when and after the Ministry of Justice opened Powell’s probe was shot down This briefly put Warsh’s confirmation calendar on hold.
What’s wrong with Trump’s Fed Chairman Kevin Warsh?
Warsh inherits a Fed that operates with less liquidity than markets had hoped. Targeted federal funds Ranging from 3.50 to 3.75% For the third meeting in a row, the March Pencils point plot remains at just one cut for 2026 and one for 2027.
Inflation is moving in the wrong direction. The Consumer Price Index jumped to 3.3% in March from 2.4% in February after a monthly reading of 21.2%. High gasoline Prices are linked to the Iran war.
Policymakers raised their baseline PCE forecast for 2026 to 2.7% from 2.4% in the same release.
Warsh sent a telegram to Sharp Axis. he he told senators at his confirmation hearing He noted that the Fed needs a “new and different inflation framework,” indicated that he would scrap the post-meeting news conference beat, and pledged not to act as anyone’s “sock puppet.”
Him too He wants the $6.7 trillion balance sheet smaller. Warsh argued under oath that the Fed’s smaller footprint could leave interest rates lower, inflation better, and the economy stronger.
All of these statements point towards faster quantitative tightening rather than lower interest rates.
Cryptocurrency Corner: Tougher, Friendlier Rates on Bitcoin
Cryptocurrency traders are sorting out a paradox. Warsh is considered more hawkish than Powell Inflationary discipline is more overtly favorable to digital assets, and this combination cuts both ways for risk markets.
His public record now includes calling Bitcoin a “sustainable store of value,” ruling out retail central bank digital currencies (CBDC), and saying cryptocurrencies are already part of the US financial system.
Him too It uncovered more than $100 million worth of property It spans layer-one networks, decentralized finance (DeFi) protocols, and Bitcoin payment infrastructure.
Tight liquidity policy continues to pressure BTC in the short term. Bitcoin has retreated from its January peak as the dot chart tightens, and traders ramp up Caught between a Fed that wants to hold the bank and a nominee that wants deflation.
There is a long term case for Bitcoin within the same trade. Former Fed Governor Mark Spindel has argued that aggressive central bank policy strengthens the case for non-sovereign reserves, and the Warsh framework could test this hypothesis from within.
What to watch on Wednesday
At the press conference that will be held on April 29, Powell is scheduled to hand over his last microphone. The markets will analyze each bye line in order to:
- Hints about discounts that didn’t arrive
- The inflation battle is heating up again, and
- Whether Powell handed Warsh a clear baton or a clear baton is disputed.
Powell could still remain on the Board of Governors until 2028, an option he has not ruled out.
If he steps aside entirely on May 15, the next FOMC meeting will be Warsh’s first, and the policy system he wants to rewrite will begin to rewrite itself in real time.
Follow us on XTo get the latest news as it happens
this post Powell’s Final FOMC: Ranking His Wins, Losses, and the Mixed Bag He Leaves for Trump’s Fed Pick Kevin Warsh appeared first on BeInCrypto.
