Jerome Powell gets grilled on the Hill

Senators yesterday grilled Powell on everything from the dismantling of the CFPB to Trump’s tariff policies

share

This is a segment from the Forward Guidance newsletter. To read full editions, subscribe.


Jerome Powell was back on Capitol Hill for his second day of testimony today. 

We do not envy him. Senators yesterday grilled Powell on everything from the dismantling of the CFPB to Trump’s tariff policies, and today was more of the same. 

Since Powell is Powell, he generally kept his answers short and diplomatic, making it particularly exasperating to watch. 

“I think the standard case for free trade and all that logically still makes sense. It didn’t work that well when we have one very large country that doesn’t really play by the rules,” Powell said. We’re thinking he’s talking about China here. 

“And in any case, it’s not the Fed’s job to make or comment on tariff policy.”

Sen. Elizabeth Warren, a key architect of the CFPB’s creation in the aftermath of the 2008 financial crisis, said not having the agency is akin to having “no cop on the beat.” 

Powell agreed that there is no other regulator currently tasked with monitoring banks and ensuring consumer protections. He added, though, that bank accounts are “safe.” 

Over in the House, crypto banking did get a little shoutout in the midst of the CFPB-talk

“Are there any backstops that we can use, any firewalls that we can put in place that might insulate the traditional banking system… if we have a collapse of a major crypto issuer?” Rep. Stephen Lynch asked on Tuesday. 

Powell conceded that it’s “appropriate” to make sure banks understand the risks that are involved in crypto activity if they’re taking on these clients, but at the same time “you don’t want to go too far.” 

“In Fed regulated banks, there are lots of crypto activities happening now,” Powell added. “They’ve just happened under a framework where we made sure that the bank understood, and we understood, exactly what they’re doing.” 

In terms of specifics on monetary policy, which was somewhat ironically the least-discussed topic on Tuesday and Wednesday, Powell simply reiterated that the committee will take its time lowering interest rates. 

“We’re in a pretty good place with this economy,” Powell said Tuesday. “We want to make more progress on inflation.” 

Wednesday’s testimony of course came after the latest CPI report showed inflation hit 3%.

Powell told reps that today’s CPI proves that “we are close but not there on inflation.” 

“So we want to keep policy restrictive for now,” he added. 

For those riding the quantitative easing train, it was easy to miss Powell’s quick comment about the practice, but he did make one:

“Quantitative easing is a tool we only use when rates are already at zero,” he said. 

Remember, QE + near zero rates almost always equals pain. Weaker currency, long-term inflation risks, the list goes on. Here’s to hoping we don’t get there.


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template Presentation.jpg

Research

The Solana validator landscape has changed drastically over the past year. The chain now has 1,332 active validators with 380.9 million SOL staked (63.9% of supply) as of February 2025. Validator revenue had diversified beyond inflationary rewards (still making up 55%) to include Jito tips (30%), priority fees (24%), and base fees (<1%), in January, especially with the increased activity on Solana. Since then, issuance has become dominant again (76%), while Jito tips (14%), priority fees (9%), and base fees (less than 1%) have reduced in share of February 2025. There has been a strong shift towards non-inflationary revenue sources, which have become more central to validator economics as priority fees and off-chain blockspace auctions gain traction. Client diversity has also improved drastically, with implementations such as Agave, Jito-Solana, and Frankendancer already in use, and upcoming clients like Firedancer and Sig expected to further strengthen resilience and reduce reliance on a single codebase.

article-image

BWR analyst Carlos Gonzalez Campo explains the consequences of SOL inflation and transfers lost to “leaky buckets”

article-image

Empire co-host Santiago Santos makes the case that memecoins have actually helped push infra forward…just not in the way you think

article-image

A16z Crypto lists seven buckets for tokens and recommendations for how to regulate them, in a filing submitted to the SEC

article-image

New model aims to resolve trading inefficiencies with a single execution layer and market maker changes

article-image

Investors navigating BTC face short-term unpredictability, influence from other markets

article-image

The GENIUS Act aims to establish regulatory guidelines for stablecoins