Federal Reserve Chair Jerome Powell suggested during a speech that regulations on crypto banking may be eased to some extent. He also emphasized that a reduction in interest rates in the near future is unlikely.

In his address at the Economic Club of Chicago, Powell acknowledged the growing uncertainty related to trade policies and emphasized the cautious approach of the central bank.

Market expectations for a rate cut in May have plummeted according to CME FedWatch data, with only a 16% chance priced in. The stock market experienced a slight dip after Powell's speech, reflecting investor disappointment at the absence of dovish signals.

Powell stressed the importance of not rushing into lowering interest rates and advocated for waiting for more clarity before any adjustments to Fed policy are considered.

Despite the crypto market remaining relatively stable, optimism for a rate cut has diminished following last week's FOMC minutes. Powell's comments supporting a legal framework for stablecoins and relaxing certain banking regulations on crypto were met with subdued reactions in the digital asset markets.

Bitcoin's price held steady around $84,500 amid concerns in the equity markets. Powell acknowledged a slowdown in economic growth at the beginning of 2025 and highlighted Trump's tariffs as a significant source of uncertainty.

The Fed remains prepared to provide dollar liquidity to global central banks if necessary, but Powell rejected the idea of a Fed "put," emphasizing the central bank's independence by law.

In summary, although Powell indicated no immediate policy easing, he expressed optimism about crypto regulation, which was viewed as a positive development in the generally hawkish economic landscape.