While the market is frozen in indecision, two main actors have taken the stage — Powell and Trump. But instead of a dialogue — a public spat. And the stakes are high.
The Fed is slowing down, Trump is pushing.
Yesterday's speech by Fed Chairman Jerome Powell sounded like a cold shower for the bulls:
"A rate cut this year is unlikely to happen."
The reason is Trump's tough economic policy, which, according to Powell, moves the regulator away from achieving its goals. A subtle hint at who is to blame here.
This morning, Donald Trump couldn't resist responding:
"Powell is always late and always wrong."
He called yesterday's speech chaotic and again stated that the rate should have been lowered a long time ago, as the ECB has already done. But here's the problem: firing the head of the Fed quickly is not possible.
What does this mean for the market?
At first glance — pure politics. In reality — a potential trigger for significant volatility.
The Fed maintains rates — the dollar continues to strengthen.
Bitcoin remains under pressure until a clear signal appears.
The U.S. stock market is in a turbulence zone: waiting not so much for decisions as for words.
Why is this dangerous?
Trump seems to be doing everything right for short-term economic growth. But aggression against the independence of the Fed could trigger a chain reaction:
Investors will start to factor in their interests and expectations regarding political interference in monetary policy.
Trust in the Fed may waver.
In times of uncertainty — safe-haven assets will come back into play.
We are not just facing a debate between two economic strategies — this is a battle for control over the future of U.S. monetary policy. And the market has not yet chosen whom to believe.
Powell is for stability.
Trump is for action.
And traders are for signals.
We are watching. We are preparing. We are not rushing.