Here’s the Crucial Jerome Powell Statement That Everyone Overlooked

After the Federal Reserve hit the pause button on interest-rate cuts on Wednesday, Chairman Jerome Powell mostly said a whole lot of nothing. However, there’s one key part of Powell’s statement that investors need to pay close attention to.

I’m not referring to his declaration that “We don’t need to be in a hurry to adjust our policy stance,” though this is notable. After all, mega-cap stock index holders already priced in their assumption of multiple rate cuts this year, and they soon may be disappointed.

Rather, I’m talking about this statement from Powell: “Banks are perfectly able to serve crypto customers as long as they can understand and service the risks.” He added that banks operating under the Federal Reserve’s oversight must ensure their clients’ activities remain “safe and sound.”

Granted, Powell’s remaining time as Fed chairman is limited. Still, he’ll be in that role for at least another year, so Powell’s softening stance on banks and cryptocurrency custody is noteworthy.

On the other hand, if you’re waiting for Powell to respond to President Donald Trump’s statements on cryptocurrency or anything else, don’t hold your breath. Powell announced, “I’m not going to have any response or comment whatsoever on what the president said… It’s not appropriate for me to do so.”

Courtesy: @CryptoYoddha

It’s fine if Powell chooses not to comment on Trump’s pro-crypto statements. Bitcoin is still on a historic run that will persist long after Powell is replaced at the Federal Reserve.

Nevertheless, it’s encouraging that Powell at least acknowledges U.S. banks’ freedom to serve their cryptocurrency-holding customers. He felt the need to add, “as long as they can understand and service the risks,” but Powell isn’t the SEC chair and he doesn’t have enforcement powers in this area.

Trump picked Paul Atkins to fill the SEC chair role, and Atkins is on board with the President’s crypto-supportive stance. With SEC Chairman Gary Gensler out of the way, the runway will be cleared for banks to offer a broad variety of services for clients interested in cryptocurrency.

Eventually, Powell will be out of the way, as well. Then, it will be easier for Trump to move forward with his proposal to establish a national strategic Bitcoin reserve.

It’s doubtful that Powell would work with Trump to build a cryptocurrency stockpile. His statement at Wednesday’s FOMC meeting may have been somewhat accommodative, but Bitcoin enthusiasts need to be patient while Powell is still in charge of the Federal Reserve.

Courtesy: CNBC, @Vivek4real_

Deep down, Powell surely knows that the Bitcoin revolution is moving forward in the U.S. with or without his approval. For instance, Wyoming Senator Cynthia Lummis proposed that the Federal Reserve could sell its gold certificates and buy Bitcoin and thereby build a Bitcoin reserve.

Whether he admits it or not, Powell must also know that inflation won’t reach the Fed’s 2% target anytime soon. In December, the Consumer Price Index (CPI) rose to 2.9%, so it’s almost guaranteed that the U.S. inflation growth rate will hit 3% before it hits 2%.

Powell might say he wants to keep Americans “safe and sound,” but dollar inflation continues to wreak havoc on consumers throughout the nation. Thankfully, whether Powell likes it or not, there are digital alternatives to the constantly deteriorating U.S. dollar.