Powell “Regulation needed to restore trust in digital assets… Interest rate cuts are premature”

Powell Fed Chair who provided a positive direction for the cryptocurrency market (Source: Federal Reserve)

Jerome Powell, Chair of the United States Federal Reserve (Fed), emphasized that “clear and comprehensive regulation is necessary to restore trust” in the digital asset market. At the same time, he reiterated that “now is not the time to discuss rate cuts” and confirmed that price stability is the top priority.

At the 75th anniversary event of the Fed's International Finance Office held in Washington on the 3rd (local time), Chair Powell mentioned two key issues: digital assets and interest rate policy. He pointed out that a clear regulation beyond the jurisdictional disputes between the SEC and CFTC is needed in situations where cryptocurrencies, like stablecoins or decentralized platforms, are gradually embedding themselves in the financial system. This is explained as a first step in reducing turmoil and volatility in the virtual asset market and realizing investor protection.

He was firm about interest rate policy. Chair Powell dismissed the market's premature expectations by stating that “there will be no rate cuts until it is confirmed that inflation is consistently converging to the target.” He indicated that in the current high-inflation situation, premature cuts may instead act as a risk.

Meanwhile, the OECD drastically lowered the U.S. economic growth forecast from 2.8% this year to 1.6% by 2025. They also warned that President Trump's tariff policy could become a burden on economic growth if it is fully implemented.

After Chair Powell's remarks, Bitcoin rebounded slightly to 105,455 dollars. While the speech provided a clear direction to the market and offered temporary relief, investors' cautious attitude continues amid global tensions and inflation concerns.

This speech is interpreted not as a surprising turning point, but as a message that clearly presented the regulatory direction and monetary policy stance to the market. As the Fed's commitment to incorporating digital assets into institutional frameworks and stabilizing monetary policy was reaffirmed, the impact of policy developments over the next few months on the market is noted.