Breaking News: Old Powell gracefully turns around, leaving the last dividend to the bulls, as Powell’s “final dance” signals a major split within the Federal Reserve.

This meeting kept interest rates unchanged at 3.50%-3.75%, in line with market expectations, but the voting result was 8 to 4. This is the most severe internal division in the Fed since 1992.
The leadership has completely “argued themselves into a frenzy.” One side advocates for an immediate rate cut to rescue the economy, while the other firmly demands removing the “rate cut hint” (Harker, Kashkari, Logan).
In the statement, the Fed described inflation as “still elevated,” whereas previously it was only “slightly high.” The Fed officially admits that soaring energy prices have made inflation more stubborn.
Powell confirmed that although he will step down as chair on May 15, he will continue serving as a Fed governor until 2028. This is to counteract interference from the Trump administration regarding the Fed’s independence. Powell’s remaining as a governor means he will continue to check and balance the next dreamer behind the scenes.
Due to 4 members opposing easing, market confidence in subsequent rate cuts this year has significantly diminished, and a stronger dollar index may suppress risk assets like Bitcoin. Powell repeatedly mentioned the impact of Middle East tensions and the Iran war on energy prices. This means if oil prices don’t fall, rate cuts are unlikely.
Plain language: Oil prices are not only a variable for inflation but also a black hole for money. When energy costs boost risk-averse sentiment and the dollar strengthens, Bitcoin, this “digital gold,” often experiences painful liquidity contraction during stagflation.
Powell did not issue harsh “hawk king” words to preserve his reputation as a “market guardian.” He left the tough questions to the next person, which indeed gave bulls a breather, but this “champagne” is indeed mixed with wormwood.
In summary, it may be too early to shout that the bull is back. Yan Fang, what do you think?
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