In the wake of the Fed's hawks and a strong U.S. jobs report, markets are now expecting the Fed to cut rates for the first time in May. However, geomacroeconomist and bestselling author Dr. Nomi Prins still believes that the Federal Reserve may make a policy shift in March, but will not cut interest rates.

After the Fed kept rates at 5.25 percent to 5.5 percent and Powell said a March rate cut was unlikely, markets recalculated their expectations, shifting from a March rate cut to a 60 percent chance of a May rate cut, according to the CME FedWatch tool.

But Prins said investors need to watch the progress of quantitative tightening (QT) more closely, and she predicted that the Fed will turn to quantitative easing (QE) sooner than many expect.

"During Wednesday's Q&A session, Powell fielded questions that suggested the Fed could ease monetary policy in other ways before the second half of the year," he said. "QT, which is working, has weakened, so QT is getting lighter and lighter."

The Fed pursues QT by withdrawing money from the economy, allowing some of the debt securities it holds to mature without reinvesting the principal. Since June 2022, the Fed has reduced its holdings by more than $1.3 trillion to $7.7 trillion.

During the press conference, Powell said that rate cuts and QE could be separated and that the Fed's balance sheet would be a specific topic at the March FOMC meeting.

At the press conference, Powell said, "We've reached a point where people are starting to pay more attention to the pace of the release of traffic and all of these issues." So at this meeting, we did have some discussion about the balance sheet, and we plan to start talking about the balance sheet in depth at our next meeting in March."

Prins added that this means the Fed could launch various forms of QE at its next meeting. "He hinted that some form of QE could come before an actual rate cut," she said.

Prins also explained how the Fed's emergency lending program, known as the Term Funding Program for Banks (BTFP), was introduced last March after the collapse of three large banks, and why it could be extended beyond March 11.

Prins expects gold to be one of the first assets to react to a possible future QE.

Prins said the main reason for the Fed to launch QE is that more and more banks will fail.

"I do see the potential for a major banking crisis and we are not out of the woods yet," she said. If that happens, it will be compensated by QE, by creating liquidity to help this particular sector."