#PowellRemarks Here’s a detailed breakdown of **Federal Reserve Chair Jerome Powell’s key remarks** from the June 18–19, 2025 policy meeting, along with market implications and political reactions:
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### **1. Interest Rates Held Steady Amid Stagflation Concerns**
- The Fed maintained the benchmark rate at **4.25%–4.5%**, citing persistent inflation risks from tariffs and a slowing economy (GDP growth revised down to **1.4%** for 2025) .
- **Dot plot projections** show a divided FOMC:
- **10 officials** expect two rate cuts (50 bps) in 2025.
- **7 officials** (up from 4 in March) favor no cuts, reflecting heightened inflation fears .
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### **2. Tariffs and Inflation Outlook**
- Powell warned that **Trump’s tariffs** will "push up prices" for consumers, with inflation expected to rise to **3% by year-end** (up from 2.1% in April) .
- **Impact delayed**: Tariff effects will fully materialize by summer as imported goods reach retail shelves .
- Near-term inflation expectations are rising, but longer-term forecasts remain anchored at the Fed’s **2% target** .
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### **3. Labor Market and Economic Resilience**
- Unemployment is projected to rise to **4.5%** (from 4.2%), but Powell noted the labor market remains "solid" with no immediate signs of weakening .
- **Dual mandate tension**: The Fed faces a potential stagflationary scenario—balancing slowing growth against tariff-driven inflation .
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### **4. Political Backlash from Trump**
- Trump escalated attacks, calling Powell **"stupid"** and accusing him of costing the U.S. "$600 billion/year" in debt interest payments by not cutting rates .
- Trump demanded a **2% rate cut**, claiming "we have no inflation, only success" .
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### **5. Market Reactions**
- **Stocks**: Mixed response (S&P 500 flat, Nasdaq +0.13%) as investors weighed Powell’s caution against resilient earnings .
- **Dollar**: Held steady, with the DXY index gaining **0.8% weekly** on safe-haven demand .
- **Bonds**: 10-year Treasury yields rose slightly to **4.39%** post-meeting
