Federal Reserve Chairman Powell's attitude towards the current data is quite contradictory.
He stated yesterday that interest rates will not decrease in the short term, with the earliest possible rate cut after September, depending on inflation and employment data. This means that the Federal Reserve's impact on the market in the short term is relatively limited, and the real variable comes from Trump.
Powell has previously admitted that the timing of last year's rate cut was too late, while the current economy shows signs of cooling.
If high interest rates are maintained, it may repeat past mistakes and exacerbate the economic downturn;
But rashly cutting rates also carries risks — Trump's uncertainty regarding tariff policies makes him concerned: without tariff interference, the inflation data that has clearly declined in April may prompt the Federal Reserve to cut rates in May-June; but once tariffs are fully imposed, the price increase of imported goods will push up inflation, potentially leading to a passive situation where inflation rebounds after a rate cut.
Based on this, Powell prefers to wait and see rather than take risks: either cut rates in advance before July to stabilize the economy, or delay until after July to intervene once the crisis is clear.
