- US Fed Jerome Powell spoke at the Economic Club of Chicago.
- Powell focused on
- Integrating stablecoins with the US financial system.
- Stressing the need to relax banking regulations on crypto.
- Reducing public debt.
- Powell might be looking to bridge the gap between his and Donald Trump’s policies.
Table of Contents
Full Video of the Speech
Trade and Tariff Policy
Tariffs were likely to generate a temporary rise in inflation, according to the Fed chairman. The US Fed said that it was less likely that inflation would be controlled in the short term, but in the long term, the US Fed is committed to keeping inflation around the 2% target.
Keeping the US inflation down was necessary, as per the chairman, to keep labor market conditions better.
Powell said that as some part of the new tariffs hit the American buyers, inflation is expected to rise. He added that it was the Fed’s responsibility to ensure that the inflation due to tariffs was a one-time phenomenon and would not impact the prices in the long run.
Will the Fed Intervene if Markets Plummet?
Jerome Powell said that the US Federal Reserve would not do so.
He said the markets were adjusting with uncertainty caused by the trade and immigration policies of the Trump administration. That uncertainty had caused the volatility. He added that despite the volatility, markets have been functioning well.
He concluded by saying that as long as markets continue to face historically unseen challenges, the volatility is expected to continue.
Need for Pro-Stablecoin Laws
The Fed chair finally admitted that cryptocurrencies, especially stablecoins, were increasingly being integrated into the mainstream financial system. The rise of stablecoins, according to the Fed Chairman, required new laws that better regulate them.
In the last half a decade, since 2020, stablecoin usage has risen through the roof.
In February 2025, Powell said in front of the Senate Banking Committee that pro-stablecoin laws were needed in the current markets.
Allowing Banks to Custody Crypto
In the Biden administration, banks were prohibited from taking custody of their customers’ crypto. Since the Trump administration ended all those executive orders, laws, and bylaws, current banks are free to take custody of cryptocurrencies deposited by their customers.
Powell stressed that allowing banks to legally take custody of crypto that their customers deposit would be good, given the increasing integration of stablecoins with traditional finance.
Unsustainable Public Debt
While responding to a question on Federal Debt, Powell acknowledged that at the current pace, the U.S. debt would become unsustainable, he said, although no one really knows the limit. He further added that countries have gone much farther than where the US lies currently.
VanEck had earlier suggested a plan where Bitcoin investments would be used to pay off 36% of the US Debt by 2049.
Powell also brought attention to very high interest payments that have been going on in the annual US government budget. Currently, interest has been one of the largest components of the US budget despite the economy doing well. Powell might be hinting towards the need for fiscal responsibility and not the evergreening of the US Debt.
Disclaimer: The website is made for informational purposes. Please connect with your financial advisor before investing.
