🚨🚨Jerome Powell – Part 1
Trade Shock Incoming: The Fed’s Balancing Act Under Fire
May 7, 2025 — In today’s highly anticipated Fed briefing, Chair Jerome Powell laid out a cautious, pressure-filled roadmap for the U.S. economy.
The message? The Fed is holding the line — but the foundations are starting to shake.
Key signals from Powell’s press conference:
• The U.S. economy is growing steadily
• Inflation is down, but still exceeds the 2% target
• The labor market is stable, but not overheating
• Wage growth remains moderate
• Consumer sentiment has dropped significantly
• Short-term inflation expectations are ticking upward
• Import fluctuations are muddying GDP readings
• The Q1 GDP slowdown is linked to shifting trade policy
And then came the warning shot:
Powell confirmed that the Trump administration’s tariff escalation is reshaping macro conditions. Tariffs are now far higher than expected. If this holds:
• Inflation could reignite
• Unemployment could spike
• The Fed may face mission conflict between price stability and employment
He concluded with a reminder: the Fed remains “well-positioned” — but ready to adjust policy fast if the data demands it.
Markets, meanwhile, are pricing in 3 rate cuts by year-end, with the first potentially in July. Powell didn’t confirm — but didn’t deny, either. A dangerous gap is forming between investor optimism and institutional caution.
Will the Fed hold its course — or are we one inflation print away from a monetary U-turn?