Fed Chairman warns of Trump's tariff policy, hints at policy patience
Fed Chairman Jerome Powell spoke on April 4, expressing concern about the inflation risks that the Trump administration's newly announced tariff policy may bring, but at the same time stressed that the Fed will not hastily adjust interest rate policy.
At a recent business news event, Powell pointed out that the 10% benchmark tariff and possible retaliatory measures bring a "highly uncertain outlook", but the central bank needs more time to assess the specific impact.
Powell said it is too early to judge the appropriate path of monetary policy, and reiterated that the Fed's core task is to ensure that short-term price fluctuations do not evolve into long-term inflation problems. Although the market generally expects the Fed to cut interest rates by at least 1 percentage point before the end of the year (according to CME data), Powell made it clear that this expectation may be dashed if inflation risks rise.
It is worth noting that Powell repeatedly emphasized the independence of the Federal Reserve in his speech and declined Trump's recent public pressure for interest rate cuts. He acknowledged that despite the good fundamentals of the US economy, low unemployment and stable demand, he also pointed out that the core inflation index (core CPI) is still as high as 3.1% (March data), far above the target level of 2%.
Against the backdrop of escalating global trade tensions, Bitcoin has shown amazing resilience, continuing to trade above $83,000, unaffected by the volatility of traditional risk assets. Analysts believe that this "immune" performance of cryptocurrencies may be due to investors viewing it as a hedge against inflation and political uncertainty.
As many countries announced retaliatory tariffs, Powell warned that the speed and extent of new pricing pressures penetrating the supply chain remain unpredictable.
Meanwhile, the Federal Reserve will announce its next interest rate decision in early May, and Powell's statement also seems to be sending a signal that the Fed will soon make a policy shift. However, before the economic fog caused by tariffs dissipates, the market may remain stable.
What changes do you think the Fed's next tariff policy will bring to the cryptocurrency market? What impact will Powell's remarks have on the market? Leave a message in the comment area to discuss!
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