FED

Federal Reserve Chair Jerome Powell has signaled a cautious approach toward potential interest rate cuts, emphasizing a data-driven strategy amid ongoing economic uncertainties.

At the Jackson Hole Economic Symposium in August 2024, Powell stated, "The time has come for policy to adjust," indicating the Fed's readiness to consider rate cuts as inflation showed signs of easing and the job market cooled. This sentiment was echoed in July 2024, when Powell mentioned that a rate reduction could be "on the table" if inflation continued to decline.

In December 2024, the Fed implemented a quarter-point rate cut, bringing the benchmark rate to a range of 4.25%–4.5%. However, policymakers projected only two additional cuts in 2025, down from the previously anticipated four, due to persistent inflation and a robust labor market.

Despite these adjustments, Powell has maintained a "wait-and-see" stance, highlighting the need to monitor economic indicators closely before making further decisions. Factors such as President Trump's trade policies and their impact on inflation and growth add layers of complexity to the Fed's policy considerations.

In summary, while the Federal Reserve has initiated rate cuts in response to evolving economic conditions, future reductions will depend on continued progress toward the 2% inflation target and the overall health of the labor market.

For a more in-depth understanding of Powell's perspective, you can watch his remarks at the Jackson Hole Symposium
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In a recent interview with CNBC, Chicago Federal Reserve Bank President Austan Goolsbee shared his position on the possibility of a FED interest rate cut in 2025.
Goolsbee states that the Fed may lower the rates in the next 10-16 months, albeit with a cautious approach due to trade policy unpredictability.
Austan Goolsbee Shares His Timeline for an Interest Rate Cut
Federal Reserve Bank official Austin Goolsbee posited that the Fed will probably keep interest rates steady for now, carefully evaluating the effects of evolving trade policies on the economy. Goolsbee emphasized that the unusually high EU tariffs could disrupt supply chains. However, as the economy remains strong, rate cuts could be possible if tariff-related uncertainties do not trigger inflation, added the Fed President. Forecasting future FED interest rate decisions, he stated,
“I’m still underneath hopeful that we can get back to that environment, and 10 to 16 months from now, rates could be a fair bit below where they are today.”
Notably, the Fed’s dovish approach could boost the crypto market growth. During the March 7 FOMC meeting, the Federal Reserve and Chair Jerome Powell left the interest rates unchanged at 4.25% to 4.5%. The decision drew widespread criticism for going against President Donald Trump’s and Treasury Secretary’s call for rate cuts. Although the central bank consecutively reduced rates in September, November, and December 2024, it has maintained steady rates since January 2025.
Trump Vs Fed, Will Jarome Powell Listen to Trump?
US president Donald Trump and Jarome Powell are famously at cross roads due to difference on tariff policy matters. Trump has publicly asked FED chairman to cut interest rates and even criticised him for delays in interest rate cuts. As per reports, Trump is planning to impose a 25% tariff on Apple if iPhones are not manufactured in the US. Earlier today, Trump proposed 50% tariff on European Union shaking the markets.
Reflecting on these developments, Goolsbee stated that the central bank is more cautious with interest rate decisions due to uncertainty surrounding Trump’s tariff policies. He noted,
“Everything’s always on the table. But I feel like the bar for me is a little higher for action in any direction while we’re waiting to get some clarity. Over the longer run, if they’re putting in place tariffs that have a stagflationary impact … then that’s the central bank’s worst situation.”
Adding that the Fed is closely watching the Trump tariffs’ impact on the economy, Goolsbee stated, “So I think we’ll have to see how big the impacts on prices are. I know people hate inflation.”
Driven by Trump’s tariff announcement, the crypto market is currently experiencing a downturn, with the total market cap falling by 0.97% to $3.47 trillion. If the Fed decides to hold the interest rate unchanged for a couple of months, it could have a negative impact on the crypto market. However, if the bank lowers rates within this period, it could be a shot in the arm for the crypto market.
On May 20, market expert Altcoin Gordon predicted that the central bank would lower rates within a 10-day timeframe. However, conditions changed with Trump’s tariff announcement before the predicted date, rendering the prediction uncertain.
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