At a time when the cryptocurrency sector and markets, in general, are facing uncertainty, Federal Reserve Chairman Jerome Powell delivered a closely watched speech that balanced caution and openness.
Speaking in Washington on Monday, Powell addressed some of the most pressing concerns in the financial system, ranging from persistent inflation that looms over hopes for interest rate cuts to the growing call for regulatory clarity in the digital asset space.
His remarks did not offer surprises, but rather signals, especially for the cryptocurrency markets seeking their path in an environment shaped by policy shifts, adverse economic winds, and renewed geopolitical tensions.
● Powell calls for clear rules for cryptocurrencies
During his keynote speech at the 75th anniversary of the International Finance Division of the Federal Reserve, Powell devoted a significant portion of his remarks to the cryptocurrency sector, an area that the central bank is increasingly monitoring as it approaches mainstream finance.
Acknowledging the disruptions that have plagued digital asset markets, from fraud to instability, Powell reiterated the Federal Reserve's stance: the United States needs comprehensive and consistent regulation that encourages innovation without compromising financial stability.
He argued that clearer guidelines would lend legitimacy to the field, eliminate dishonest actors, and provide greater confidence for institutional and individual participants in dealing with blockchain-based assets.
These comments come as federal agencies, including the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), continue their diligent efforts to identify and regulate various aspects of the cryptocurrency economy, from stablecoins to decentralized platforms.
● The Federal Reserve does not see an urgent need to cut interest rates
Alongside cryptocurrencies, Powell addressed monetary policy and inflation, which are among the market's top concerns.
Despite rising hopes for rate cuts earlier this year, the Federal Reserve Chairman denied any expectations of an imminent shift.
Economic data remains mixed, but with inflation continuing above the target level, Powell made it clear that the Federal Reserve is prepared to keep interest rates steady until sustainable progress is achieved.
Adding weight to the Federal Reserve's position, the Organization for Economic Cooperation and Development (OECD) released revised economic forecasts predicting a slowdown in U.S. GDP growth from 2.8% in 2024 to 1.6% in 2025 and 1.5% in 2026.
The organization also pointed to the potential risks from the tariffs proposed by President Trump, warning that they could negatively impact growth and policy clarity.
Powell's message: caution now, flexibility later.
