🎙️ Powell’s Main Messages
1. Interest Rates Held Steady
The Federal Open Market Committee (FOMC) maintained the federal funds rate at 4.25 – 4.50 %, marking the fourth consec pushe Powell emphasised that the current rate level provides flexibility to respond to future data 2. Data‑Driven, Cautious Approach
He stressed the importance of incoming economic data, especially from labor markets and inflation metrics, reaffirming a “wait‑and‑see”
The Fed remains wary of tariff-related inflation and wants to see how much consumers ultimately bear
3. Dual Mandate Focus
Powell reiterated the balance of the Fed’s dual mandate: promoting maximum employment (with unemployment around 4.2%) and achieving stable prices (inflation a bit above the 2% target) He warned that tariff-driven price increases could become persistently entrenched if left unchecked
4. Economic Outlook & Projections
GDP growth is projected at 1.4% in 2025 (down from earlier estimates of ~1.7%) Core inflation is forecast to remain elevated, with core PCE rising ~3.1% in 2025, and slightly tapering toward 2.4%–2.1% by 2026–27 .
While the FOMC still expects two rate cuts in 2025, uncertainty remains high—with 7 of 19 officials already expecting no cuts
5. Concerns Over Data Quality
Powell expressed concern about resource cuts at agencies like the BLS, noting that poor-quality data could undermine policymaking
6. Market Impact & Political Context
Equity markets held steady, though Powell’s caution on tariffs introduced a modest decline in stock prices .
Political pressure continues—most notably from former President Trump, who called Powell “stupid” and demanded rate cuts The Fed, for now, remains steadfastly independent
🧭 Bottom Line
The Fed is clearly in holding pattern, balancing a still‑tight labor market with inflation risks—particularly from tariffs. Powell emphasized data over politics, signalling that any rate cuts will be conditional and tentative, likely not before September, and contingent on whether inflation remains anchored