Powell of the Fed Reaffirms Patience on Interest Rates in Congressional Hearing

Jerome Powell, Chairman of the Federal Reserve, did not make many changes in his stance compared to his recent remarks, reiterating that the economy is in good shape, providing the central bank with the patience to consider loosening monetary policy. "Currently, we are in a good position to wait and learn more about the possible developments of the economy before considering any adjustments to our policy stance," Powell said in remarks prepared for his semiannual monetary policy report to Congress. Today's testimony is particularly noteworthy as there are discussions this week from Fed Governors Chris Waller and Michelle Bowman. Both have indicated they would support a rate cut at the next Fed meeting. So far, Powell has not signaled any such move. Disagreement with Powell - not necessarily big news - occurred as President Trump continued to express his dissatisfaction with the Fed chairman's reluctant monetary policy easing. According to CME FedWatch, the likelihood of a rate cut in July remains quite low, at only 18.6%. By September, the possibility of one or more rate cuts increases to over 80%. Powell has been asked more than once about issues affecting the cryptocurrency industry, although it is not a significant area to inquire into on Tuesdays.

When asked about the changing benefits of cryptocurrencies in the US banking industry, he said he sees a 'very significant change in tone' indicating an increase in the future of digital asset activities based on 'development thinking and the state of development of the cryptocurrency industry'. While his agency has been accused by the industry of encouraging banks to stay away from cryptocurrencies due to the risks involved, he said the Fed's view is "that banks determine who their customers are". "Banks are also free to carry out cryptocurrency activities, as long as they do so in a way that protects safety and health," he told lawmakers. Powell also expressed support for the process of issuing cryptocurrency legislation in the National Assembly. "I think it's great that those bills are being processed," he said. "We need it. We need a stablecoin framework."