Jerome Powell's eight-year tenure as Federal Reserve chair officially ended on May 15, 2026, marking the longest Fed chairmanship in over a century. According to Bitget crypto news, the central bank announced that Powell will serve temporarily as the 'Acting Chairman' until Walsh is formally sworn in as Chairman of the Federal Reserve. Powell will also maintain his role as a member of the Board of Governors, a position whose term runs until January 2028. As reported by Cryptonomist, this unusual in-between period matters because markets dislike uncertainty almost as much as they dislike inflation surprises, meaning Powell's presence inside the Fed does not disappear overnight. At his final press conference, Powell bid farewell to journalists with 'see you no more next time,' before turning and leaving the stage. The transition has drawn mixed reactions, with former Fed Chair Christine Lagarde praising Powell's 'great leadership, focus on mandate, and unwavering commitment to the public interest' on social media, while others criticized his decision-making and interest rate policies.
Powell faced unprecedented political pressure throughout his tenure, with President Trump launching a criminal investigation into Powell in January 2026, marking the first criminal investigation of a Fed chairperson in the Federal Reserve's 113-year history. As reported by Bitget crypto news, Trump targeted cost overruns in the Federal Reserve headquarters renovation project, with the investigation focusing on Powell's congressional testimony regarding the project's cost overruns. In July 2025, Trump formally visited the Federal Reserve for the first time in nearly twenty years, donning a hard hat to tour the construction site. Powell delivered a rare video address in response, directly calling out the investigation's political motivations and its intent to influence rate decisions. He emphasized that 'no one is above the law,' but that this unprecedented action should be regarded within the context of the current administration's threats and sustained pressure.
The April 2026 U.S. Consumer Price Index (CPI) showed headline inflation surged to 3.8% year-over-year, reaching a three-year high due to the impact of the Israel-Iran war, with gasoline prices surging significantly. According to Coinbase analysts, hotter CPI and PPI forced markets to reprice inflation risk, with real wages and sentiment falling while jobless claims remain low. Former Federal Reserve Vice Chair Alan Blinder commented that 'the economic situation is quite good, but far from perfect,' attributing part of the inflation to Powell but also praising his commitment to independence. The unemployment rate remained stable at 4.3%, nearly matching the level when Powell assumed office in 2018. Powell's early characterization of inflation as 'transitory' proved to be a serious misjudgment, which he later openly admitted. By June 2023, inflation plummeted to 3% without causing the predicted economic recession, achieving the rare feat of a 'soft landing' after aggressive rate hikes pushed the benchmark interest rate to its highest since 2001.
Coinbase analysts cautioned that sticky inflation could cap crypto's potential upside, noting that crypto upside exists but beta expansion likely requires improved liquidity or lower inflation. As reported by Cryptonomist, for Bitcoin and broader crypto markets, the key question is whether the next phase of U.S. monetary policy brings relief or more turbulence. The formal date is clear: Powell's second four-year term as Fed chair ended on May 15, 2026, but the transition itself is not finished, with Powell remaining in a temporary capacity until Walsh is sworn in. Coinbase analysts pointed to two developments that could improve the setup for Bitcoin and crypto: the CLARITY Act passing a Senate floor vote and improved liquidity conditions. The current economy presents a complex picture: while it shows resilience, it also faces a new wave of inflation, setting up a tense near-term test for the Bitcoin inflation outlook.
The transition to new Fed leadership comes amid bumpy conditions including sticky inflation and uncertainty around the West Asia crisis, which could spill over into Bitcoin and the crypto market. According to Cryptonomist, a new Fed chair taking over amid sticky inflation leaves little room for an easy debut. If Walsh's first meeting arrives with markets already leaning toward a pause, investors may spend less time looking for dramatic policy change and more time parsing tone, language, and signals about the second half of the year. FundStrat's Tom Lee captured that unease in a simple warning: 'We're going to face some tests later this summer' as the new leadership navigates these challenging macroeconomic conditions. Market pricing still points to another pause as inflation remains sticky, setting up a tense near-term test for the Bitcoin inflation outlook. Powell's political legacy will be judged by the choices and resolve displayed amid these crises, with the Federal Reserve entering a new phase under Walsh's leadership amid an institution resilient in structure but battered politically.
