#PowellRemarks 🏛️ Powell’s Key Messages

1. Rates Remain Unchanged

• The Fed held the federal funds rate at 4.25–4.50% for a fourth consecutive meeting .

• Chair Powell emphasized that this stance offers flexibility to respond to incoming economic data .

2. Inflation & Tariffs

• Inflation (PCE) sits above target—2.3% headline, 2.6% core—prompting concern .

• Tariff-driven price increases may push inflation higher through summer .

3. Economic Outlook: Slow Growth, Tight Labor

• Growth projections were downgraded to ~1.4% for 2025; unemployment forecast mildly elevated at ~4.5% .

• Powell confirmed the labor market remains strong at a 4.2% unemployment rate and steady job gains (~135k monthly) .

4. Cautious Approach to Rate Cuts

• The median dot‑plot still shows two rate cuts in 2025 (~3.9% year-end), down from earlier projections, with fewer cuts expected in 2026–27 .

• Powell refrained from committing to dates, calling forecasts “foggy” and urging a wait‑and‑see approach .

5. Balancing Mandates with Elevated Uncertainty

• The Fed continues to juggle its dual mandate—maximum employment and 2% inflation—amid notable risks .

• Elevated uncertainty—due to trade, tariffs, geopolitical events, and energy—justifies the cautious stance .

6. Fed Framework Review Underway

• Powell noted the Fed is reviewing its longer-run framework, incorporating lessons from supply shocks (tariffs, pandemic, weather), with updates expected by late summer .

---

💡 Summary & Market Implications

No rate cuts for now — policy remains data-dependent, not calendar-driven.

Watch inflation and tariff developments, as they may delay any easing.

Markets remain cautious: anticipation of cuts around September, but uncertainty prevails .

---

✅ Takeaway for Investors & Consumers

Borrowers: don’t expect lower rates immediately—mortgage and lending rates likely to stay high.

Savers: deposit and money-market rates remain healthy at current levels.

Watch for inflation data and tariff news—if inflation keeps rising, rate cuts may be postponed.