Breaking NEWS: Powell press conference reveals Federal Reserve’s $40B Treasury bill purchase plans
Fed Chair Powell expanded on Wednesday’s 25bps rate cut, clarifying the Fed’s pivot and signaling potential policy evolution. The FOMC statement noted moderating inflation and employment risks, but Powell added context that could impact markets directly.
He downplayed recent goods inflation, attributing it to tariff pass-through rather than sustained overheating. Calling these “one-time price shifts” suggests no structural barrier to continued disinflation, leaving the door open for further cuts if labor conditions soften.
Powell emphasized rising employment risks: slower job gains, weaker wage growth, and easier hiring indicate a cooling labor market. This marks a shift from the Fed’s two-year inflation-first stance.
A key market takeaway: the Fed will begin $40B/month Treasury bill purchases to maintain “ample reserves.” While not QE, this injects liquidity, easing financial conditions and supporting risk assets like crypto.
Powell avoided pushing back against market expectations for additional 2026 cuts, reinforcing the idea that Wednesday’s move could be the start of an easing cycle. Long-term inflation expectations remain anchored, reducing the chance of policy shocks.
For crypto, this macro backdrop is supportive: temporary inflation, rising employment risks, new liquidity, and room for more cuts all favor Bitcoin and digital assets. Should labor soften or inflation ease further, risk appetite could drive accelerating inflows into the market.
