#PowellRemarks

#PowellRemarks

Federal Reserve Chair Jerome Powell delivered measured yet pointed remarks following the FOMC meeting on June 18, 2025, emphasising caution amid evolving economic conditions.

🎙️Key Takeaways from Powell's Comments;

1️⃣ Rates Held Steady:

The Fed maintained its federal funds rate at 4.25–4.50%, marking the fourth consecutive hold.

2️⃣ Data-Dependent Outlook:

Powell stressed that forecasts carry “little conviction” and that policy will remain fully data-dependent. He specifically pointed to uncertainties from tariffs and evolving fiscal/regulatory shifts.

3️⃣ Tariff-Driven Inflation Concerns:

A recurring theme was the risk of inflationary pressure from recently imposed tariffs. He urged patience to determine whether price increases are temporary one-offs or more persistent.

4️⃣ Economic Outlook:

Powell described the economy as “in a solid position”—with unemployment near 4.2%, healthy wage growth, and GDP holding at roughly 2.5%.

5️⃣ Warning on Data Cuts:

He expressed concern about proposed budget reductions to key statistical agencies—especially the Bureau of Labor Statistics—arguing that these cuts could weaken the accuracy of critical economic data like CPI.

6️⃣ Emphasis on Dual Mandate:

The dual objectives—maximum employment and 2% inflation—remain central. Powell emphasized the Fed’s aim to prevent temporary inflation shocks from becoming entrenched.

📈 Market & Public Reaction:

Stock markets dipped as Powell signaled that rate cuts aren’t imminent and identified tariffs as a risk to growth.

Despite pressure—particularly from President Trump—to lower rates, the Fed reaffirmed its independence and commitment to evidenced-based decision-making.

🔮 Looking Ahead:

Powell’s stance suggests the Fed will lean into a wait-and-see strategy. Policymakers await clearer signs on tariff impact and evolving inflation before any rate changes.