๐ฃ Powell's Key Points
As expected today the Fed left interest rates unchanged at 4.50%, after which Powell's press conference began, here's what he said:
๐ด He said the economy remained "robust," which largely reflected what was said in the statement following the meeting.
๐ด Powell notes that the first-quarter contraction was largely driven by import fluctuations, so that makes it a bit harder to measure GDP now.
๐ด Tariff increases this year are likely to push up prices and put pressure on economic activity.
๐ด Powell responded to the tariff question in a blunt manner, signaling that while the Fed doesn't know exactly how trade policy will play out, at least in the short term, it will have an impact on prices and activity.
๐ด Powell, asked about the latest inflation reports, notes that commodity prices are rising and "we expect even more" in the summer. It will take time for imports to be reflected in retail prices, he says.
๐ด The smartest thing to do, Powell said, is to "stay where we are."
๐ด "We feel like we'll learn a lot more about tariffs over the summer," Powell said.
๐ด "Everyone I know is predicting a significant price increase because of tariffs, because somebody has to pay for the tariffs," Powell says. The question is who.
๐ด Powell said he has no idea whether he will remain on the Fed's board after his term as Fed chairman expires in May.
๐ด Powell says the Fed is monitoring conflicts in the Middle East but does not comment on them.
๐ฏ The market reaction was more negative as Powell gave no sign of a Fed rate cut this year, instead focusing on tariffs that would likely boost inflation.
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