Jerome Powell Speech: Fed Chair Talks Upcoming Rate Cuts and Bitcoin Reserves

For the third time this year, the United States Federal Reserve, under Jerome Powell’s leadership, has implemented an interest rate cut. With the US economy showing relative stability, Powell indicated that the risks to meeting employment and inflation targets are now balanced. The rate cut brings the Fed funds rate to a range of 4.25% to 4.5%.

Jerome Powell and Interest Rate Outlook for 2025

Despite their confidence in taking economic action this year, the Feds have always acknowledged the existing inflationary pressures and unemployment strain. Fed Chair Powell said the Fed is confident in the economy’s expansion overall, with inflation closer to the projected 2% level.

With the latest 25 bps interest rate cut, he highlighted how less restrictive the Fed’s economic policy is at the moment.

“Today, the FOMC decided to take another step in reducing the degree of policy restraint by lowering our policy interest rate by a quarter percentage point,” Fed Chair Powell says, adding: “Our policy stance is now significantly less restrictive.” pic.twitter.com/XOPmZlZQSZ

— Yahoo Finance (@YahooFinance) December 18, 2024

While for future cuts, Jerome Powell said the Fed has no defined pace to adjust the rate.  He revealed that the Federal Open Market Committee (FOMC) will assess incoming data, the evolving outlook and balance of risks before deciding on future actions.

The Federal Reserve made its first interest rate cut in September when it announced a 50 BPS slash. With a cooling period in October, it announced a 0.25% cut in November before this latest cut. While he believes there might be a relative slowdown in interest rate cuts, the place of economic data cannot be overemphasized.

Bitcoin and Crypto Market Reacts Again

The uncertainty in the speech from Jerome Powell arguably unsettled crypto traders. As of writing, the price of Bitcoin was down by 3.91% in 24 hours to $101,341. Besides BTC, altcoins also took a beating with Ethereum (ETH), XRP and Solana (SOL) now 5.35%, 9.91% and 7.23% respectively.

Although the market reversed its gains earlier today, the Fed Chairman commented on the push for a Bitcoin strategic reserve in the US. He claimed the Federal Reserve has no powers to keep such asset, undermining the confidence in the plan.

While the Donald Trump administration has not shared a comprehensive plan on how it hopes to achieve this reserve, defined efforts are underway in that regard.