Jerome Powell will hold his final FOMC press conference on April 29, ending eight years at the helm of the Fed at a challenging moment. The rate remains in the 3.50–3.75% range, inflation has risen again to 3.3%, and the market is still waiting for signals of rate cuts. His successor, Kevin Warsh, inherits the Fed with an unfinished fight against inflation, a $6.7 trillion balance sheet, and markets accustomed to living by liquidity signals.
This transition is especially important for the crypto market. During Powell’s years, Bitcoin became an asset that reacts sharply to Fed decisions, bond yields, and expectations for the regulator’s balance sheet. Now the market is trying to understand whether Warsh will bring a new regime or just a tougher version of the familiar policy.
Powell Inherited a Calm Market but Leaves With Unresolved Risks
When Janet Yellen handed the Fed to Powell in 2018, conditions were relatively mild. Rates were around 1.5%, inflation was near target, and the regulator’s balance sheet was already shrinking as planned. Powell inherited an economy without a recession and tried to maintain that scenario through gradual rate hikes.
His term turned out to be much more complicated. The pandemic, record balance sheet expansion, the highest inflation since the 1980s, and the banking stress of 2023 made his era one of the most turbulent for the Fed. That is why Powell’s final FOMC does not look like a calm transfer of power, but rather a transitional moment with many open questions.
Powell’s Main Victory Came in March 2020
Powell’s supporters consider his actions in March 2020 his main success. The Fed quickly cut rates to zero, resumed asset purchases, and launched emergency lending programs. Markets received liquidity at a time when the financial system could have entered a full-blown crisis.
This policy also changed the crypto market. Bitcoin rose from about $5,000 in March 2020 to a peak above $69,000 in November 2021, moving in tandem with the Fed’s balance sheet expansion. It was then that BTC finally entered the radar of major investors.
The Second Success Is Linked to a Soft Landing
Later, Powell led the sharpest rate hike cycle since Paul Volcker. The rate rose from zero to 5.5%, but the economy did not fall into a deep recession, and the labor market did not collapse. This became the main argument for those who consider his course justified.
By the end of 2024, Powell also changed his tone regarding bitcoin. His comparison of BTC to ‘virtual gold’ became an important market signal and helped strengthen the perception of bitcoin as an alternative reserve asset. For the crypto market, this was a rare moment when the Fed chief effectively acknowledged BTC’s unique role in the financial system.
The Inflation Mistake Remains the Main Drawback
The main criticism of Powell is related to his assessment of inflation in 2021. The Fed called rising prices temporary for too long, even though CPI was already above 7%. Rate hikes only began in March 2022, when inflation was already entrenched in the economy.
This delay became the basis for criticism from Kevin Warsh. He called the late response a ‘fatal policy mistake’ and said the Fed needs a new regime. For markets, this means the new chair may be less tolerant of inflation and quicker to respond to price risks.
The 2023 Banking Stress Became the Second Major Problem
The sharp rate hike cycle helped contain inflation but created problems for banks with long-term bonds on their balance sheets. Silicon Valley Bank, Signature Bank, and First Republic collapsed within days in March 2023. This was a painful reminder that policy tightening quickly exposes weak points in the financial system.
Powell’s critics believe the Fed waited too long and then was forced to act too abruptly. As a result, the blow hit not only inflation but also regional banks. This episode still affects trust in the regulator’s communication.
Warsh Inherits the Fed With a High Rate and a New Wave of Inflation
Kevin Warsh arrives at a time when markets were expecting a softer course, but the data does not give the regulator room for a sharp reversal. The rate has remained in the 3.50–3.75% range for the third meeting in a row. The March FOMC forecast suggests only one cut in 2026 and another in 2027.
Inflation has become a problem again. CPI rose to 3.3% in March after a jump in gasoline prices linked to the war around Iran. The core PCE forecast for 2026 was also raised, making rapid rate cuts less likely.
Warsh Wants to Change the Fed’s Regime
At Senate hearings, Warsh spoke about the need for a new inflation framework. He also criticized the previous communication format and advocated for a smaller Fed balance sheet. His position points to a tougher line on liquidity, even if rates are not formally raised.
The balance sheet issue is especially important. The Fed’s assets are now about $6.7 trillion, and Warsh believes a smaller balance sheet can be combined with a healthier economy and lower inflation. For markets, this means the risk of accelerated liquidity reduction rather than quick support through rates.
For Bitcoin, Warsh Looks Ambivalent
The crypto market is getting a mixed signal. On the one hand, Warsh is tougher on inflation and may reduce the balance sheet more quickly. This is unfavorable for BTC in the short term because bitcoin remains sensitive to liquidity conditions.
On the other hand, Warsh has publicly acknowledged bitcoin as a resilient store of value, opposed a retail central bank digital currency, and said cryptocurrencies have already become part of the US financial system. His personal disclosures also show large investments in crypto assets and related infrastructure. For the industry, this is a rare combination of tight monetary policy and a friendlier attitude toward digital assets.
The Market Watches Rates, the Balance Sheet, and the Press Conference Tone
Powell’s final press conference will be important not only as a symbolic finale. The market will look for signals about why rate cuts have not arrived, how seriously the Fed views the new rise in inflation, and how Powell will hand over the agenda to Warsh. Even the wording can affect bonds, stocks, and bitcoin.
There is also a political detail. Powell may remain on the Board of Governors until 2028, even if he leaves the chairmanship on May 15. If he stays in the system, the transition to Warsh’s new policy may be less abrupt than the market expects.
What Comes Next?
For investors, the main question is simple: will the Fed under Warsh be softer on the crypto market but tougher on liquidity? If the new chair accelerates balance sheet reduction and remains cautious on rates, bitcoin may face short-term constraints even with more favorable rhetoric on digital assets. If inflation starts to fall, BTC will have more room to grow.
Powell leaves with a mixed legacy. He saved the markets in 2020, carried out sharp tightening without a deep recession, but made a mistake on inflation and left his successor a difficult balance between prices, rates, and liquidity. For Warsh, this is not a clean slate but a set of unresolved issues that will immediately test the markets and the crypto industry.
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