Powell: No Rush for Rate Cut in March, Crypto Banks Welcome

Federal Reserve Chair Jerome Powell reiterated that there is no need to rush a rate cut in March, signaling a cautious approach to monetary policy. Powell's remarks come as the Fed continues to monitor economic indicators and assess the impact of recent interest rate cuts.

The Fed has been closely watching the labor market and inflation trends, with the unemployment rate stabilizing and the labor market remaining solid. However, inflation remains somewhat elevated, and the economic outlook is uncertain. The Fed's dual mandate of achieving maximum employment and stable prices is a key consideration in its decision-making process.

Powell's comments follow a series of interest rate cuts at the end of last year, with the current target range at 4.25%-4.5%. The Fed's projection materials indicate that the majority of participants expect to end 2025 in the 3.75%-4% range. However, the future trajectory of interest rates remains uncertain, as markets are largely expecting the Fed to continue its pause through March.

The Fed's approach to cryptocurrency has also been a topic of discussion. Powell has stated that banks are free to serve crypto clients, provided they effectively manage the associated risks. The Fed remains open to innovation in financial markets, acknowledging the regulatory challenges faced by the crypto industry.

Powell's remarks have been met with optimism in the crypto market, with many assets rallying after a day of slump. Bitcoin, for example, rebounded 3.3% after Powell's speech, touching $104,774.44. The total crypto market is currently valued at $3.52 trillion, with Bitcoin dominance at 58.48%.