Welcome to the Forward Guidance newsletter, brought to you by Casey Wagner and Ben Strack. Here’s what you’ll find in today’s edition:

• Casey unpacks yesterday’s Federal Reserve press conference, and how it relates to another agency head. 

• The post-election crypto implication discussions continue, as Ben chatted with Bitwise’s CIO.

• A look at some economic data during a week headlined by Trump’s win and a rate cut.

Chair Powell says he won’t step aside if Trump asks 

This week’s FOMC meeting ended as expected Thursday, with central bankers opting to lower interest rates by 25 basis points. President-elect Donald Trump, however, may have been caught off guard by some of Fed Chair Jerome Powell’s comments. 

Powell asserted yesterday that he had no intention of leaving his post before his term ends in 2026, even if Trump asks him to step aside. 

“No,” Powell said simply when asked during the post-FOMC press conference if he would resign at the new administration’s request. 

To be clear, Trump said in June that he would allow Powell — a Trump appointee — to serve out his term. The comments come after the former president threatened to remove Powell during his first term in the White House, an act Powell said Thursday is not legally sound. 

Removing a chair, Powell said, is “not permitted under law.” 

The comments got us thinking about a topic we’ve talked about before: Trump’s plans for the SEC. I was in Nashville when Trump proclaimed at the Bitcoin 2024 conference that he would “fire Gensler on day one” — a promise that riled up the crowd more than I think even Trump imagined. 

There are a few possible outcomes now that we know Trump will be moving back to Washington in January. First, it’s worth noting that agency chairs often resign on their own once the president that nominated them leaves office. 

Chair Mary Jo White, who served under the Obama Administration, announced she’d be leaving shortly after Trump was elected. Jay Clayton, White’s successor, did the same after Trump lost his re-election bid in 2020. Both departures gave the incoming president the power to select an interim chair before ultimately submitting a nomination for Senate approval. 

We haven’t heard any comments from Gensler yet. But even if he doesn’t step aside before Inauguration Day, legal scholars generally agree that Trump would be allowed to name a current commissioner as acting chair. 

The concept of “firing” an agency chair is a bit of a legal gray area, though. 

“Courts’ general view is that the president can only remove a commissioner, including the chairman, of the SEC ‘for inefficiency, neglect of duty or malfeasance in office,’” said Jon Ammons, a partner in Reed Smith’s onchain digital asset group.

Regardless, the current consensus seems to be that Commissioner Mark Uyeda would take over for Gensler — at least as acting chair before Trump nominates an outsider. Rumor has it that Robinhood chief legal officer Dan Gallagher, who has had his own unproductive dealings with the securities regulator, is on Trump’s short list. 

If I were Gensler, I’d give Powell a call. I bet he already has.

— Casey Wagner

The inflows into US spot bitcoin ETFs on Thursday, per Farside Investors data.

It is the segment’s best single-day flow total since these funds launched in January — breaking the previous best mark of just over $1 billion, set on March 12. The category has now eclipsed the $25 billion net flow mark after roughly 10 months on the market.

Many expect crypto allocations from institutions to accelerate after Donald Trump’s election win (more on that below).

Bitwise CIO Matt Hougan was not in his office when I connected with him via Zoom yesterday; he was kind enough to take a quick break from meeting clients to chat. 

That is to say, he is “on the ground” and knows as well as anyone how financial advisers and institutions are thinking about crypto.

Donald Trump’s election win, and the high number of pro-crypto Congress members set to be on the Hill, “removes the last vestige of reputational risk from crypto,” Hougan told me. 

“It has still been the case, even post ETF, that in the mind of professional investors, there’s been this lingering cloud of risk,” he added. “You had a hostile regulatory environment, you had an SEC investigation every couple of weeks, you had people not certain where it was going.”

This change will drive buying, while long-time bitcoin holders are unlikely to want to sell before the $100,000 mark given the likelihood of regulatory clarity. 

Many won’t necessarily need to wait to see if the Trump/GOP crypto promises are delivered on, Hougan argued — given the explicitness of the pledges and how involved the crypto industry was from a funding and lobbying perspective.

Some pensions and endowments already have exposure to bitcoin (and ETH too). While more are getting closer, certain institutions (even if interested in such an allocation) need to go through a time-consuming process involving board approvals and investment policy changes.

“If the head of research at an endowment saw the news and thought this is good for crypto, he can’t allocate 2% tomorrow,” Hougan said.

“So I do think you’re going to see institutional ownership show a step-function increase in Q4,” he added. “And then I think it follows an exponential curve from Q1 onwards.”

Check blockworks.co in the coming days for my full interview with Hougan.

— Ben Strack

Happy Friday! It’s been a busy week with the US election, FOMC rate decision and some major market moves. Here’s a recap before you (hopefully) unplug for the weekend: 

• As we covered yesterday, the Fed opted to cut interest rates by 25bps. Given this was widely anticipated, the relatively muted US equity moves that followed shouldn’t come as a surprise. Powell’s press conference, however, apparently reinvigorated investor confidence. The S&P 500 on Thursday notably just missed 6,000, a key resistance level the index exceeded later during Friday’s session. While Tuesday’s election results almost certainly had no impact on the committee’s decision, the president-elect had signaled during his last term (and the campaign) that he was not happy with the central bank head’s performance. 

• Weekly initial jobless claims on Thursday ticked up slightly, as expected by economists. There were 221,000 new applicants the week ended Nov. 2, which was an increase of 3,000 from the week prior. Continuing claims for the week ended Oct. 26 increased to 1.89 million, the highest level since November 2021. Initial claims remaining low while continuing claims increase shows that while employers don’t appear to be having major layoffs, they also aren’t doing a ton of hiring. Markets didn’t seem too concerned, though, which makes sense given this generally “goldilocks” report bodes well for the Fed’s coveted soft landing.

— Casey Wagner

• AP News currently shows Republicans holding a 211-199 lead in the House of Representatives, with 25 races yet to be called. Set to have control of the White House and Senate, the GOP eyes the so-called sweep.  

• Bitcoin’s price eclipsed $77,000 (a new all-time high) Friday afternoon, remaining around that level at 2 pm ET — up 1.4% from 24 hours prior. ETH was trading at roughly $2,960 at that time, a 2.2% increase from a day ago. 

• Though you already heard about bitcoin ETFs, US ether ETFs saw inflows on Thursday too (a more rare feat for the sector). Those amounted to $80 million, the category’s third-highest total in a single day since those funds launched in July. 

• We talked about Galaxy CEO Mike Novogratz’s post-election outlook yesterday. His company’s stock price (about $25 CAD at time of writing) had risen another 5% on Friday (as of 2 pm ET) after two days of big gains. Benchmark’s Mark Palmer changed his target price for GLXY shares from $19 CAD to $29 CAD — citing “strengthening tailwinds in the cryptocurrency and AI/HPC spaces.”