Federal Reserve Chair Jerome Powell maintains a cautious stance: interest rate policy requires more information to support it

Jerome Powell reiterated during his testimony before the U.S. Congress that the Federal Reserve currently does not need to rush into monetary policy adjustments. The Fed chair stated that it is wise to remain patient until more economic development information becomes available. He pointed out that the U.S. economy is currently in good shape, providing the Federal Reserve with ample room to maneuver.

“We are in a good position right now to wait for more information on how the economy might develop before considering any policy changes,” Powell said in his semiannual monetary policy report to Congress.

Jerome Powell’s Policy Stance and Internal Fed Disagreements

Recently, there have been differing voices within the Federal Reserve Board, contrasting with Powell’s cautious stance. Board members Chris Waller and Michelle Bowman both indicated this week that they support lowering interest rates at the next Fed meeting. Prior to this, Powell had not shown any signs of considering such measures.

This policy disagreement comes at a sensitive time—President Trump continues to pressure Fed Chair Powell to adopt more aggressive easing policies. While this split itself is not necessarily breaking news, it reflects broad internal discussions within the Fed about the policy direction.

Market Expectations vs. Reality for Rate Cuts

According to data from the Chicago Mercantile Exchange’s Fed Funds futures, the market’s probability of a rate cut in July is relatively conservative at about 18.6%. In contrast, by September, the likelihood of one or more rate cuts rises to over 80%. This indicates that even if there are voices within the Fed supporting earlier action, the overall market still views the timing of rate cuts as cautious.

The Fed’s Changing Attitude Toward Cryptocurrencies

During his congressional testimony, Powell was repeatedly asked about issues related to the crypto industry. When asked how U.S. banking interest in digital assets has changed, he mentioned observing a “very noticeable shift in attitude.” This change suggests that activity around digital assets may increase in the future, driven by “evolving mindsets and changing positions of the crypto industry.”

Although the crypto industry has previously accused the Fed of blocking banks from working with digital asset firms, Powell clarified that the Fed’s stance is that “banks decide who their clients are.” He emphasized that as long as banks conduct crypto operations safely and sustainably within the regulatory framework, it is acceptable.

Additionally, Powell expressed support for Congress advancing cryptocurrency legislation. “It’s encouraging to see bills moving forward,” he told lawmakers, “we need such a legal framework. We especially need regulation around stablecoins.” This indicates that the Fed is open to establishing a more comprehensive regulatory system for digital assets.

Stablecoins and Regional Economies: New Frontiers in Crypto Applications

Beyond Fed policy developments, the application of cryptocurrencies worldwide is accelerating. In Latin America, crypto trading volume is projected to grow by 60% by 2025, reaching a total of $73 billion. This growth is driven by increasing user adoption of digital assets for everyday payments and cross-border transfers.

Brazil and Argentina are leading this trend. Brazil dominates in trading volume, while Argentina’s adoption rate is rapidly rising, mainly fueled by cross-border payment needs and widespread use of stablecoins. Stablecoins play a significant role in the region’s economy—they provide practical use cases such as remittances abroad, withdrawals from platforms like PayPal, and bypassing traditional banking systems. The rapid adoption of stablecoins reflects a specific example of what Jerome Powell mentioned as the “changing position of the crypto industry,” shifting from a speculative tool to a payment infrastructure.