#PowellRemarks Here's an update on Jerome Powell's recent remarks:
Key Points from Powell's Remarks
- *Tariffs and Inflation*: Powell warned that significant tariff hikes could have a two-fold negative effect: weighing on economic activity and boosting inflation. He emphasized that the outcome of tariff policies depends heavily on the specifics and level of tariffs imposed.
- *Interest Rates*: The Federal Reserve held interest rates steady for a fourth straight meeting, citing uncertainty around tariffs and their potential impact on inflation. Powell signaled that policymakers are beginning to see some effects from tariffs but expect more over the coming months.
- *Economic Outlook*: Powell expressed caution, stating that the economy has proved resilient so far, with inflation rising less than expected recently and unemployment holding steady. However, he noted that uncertainty remains elevated.
Impact on Markets
- *Cryptocurrency Market*: Powell's remarks have been making waves in the cryptocurrency market, with some cryptocurrencies rallying after he hinted at possible interest rate cuts starting in September. Strike CEO Jack Mallers even suggested that Powell's comments could signal the beginning of the end for the US dollar, potentially boosting Bitcoin's value.
- *Market Volatility*: Powell acknowledged that recent market swings are a natural response to changing trade policies and not something that requires Fed intervention at the moment.
What's Next?
- *Rate Cuts*: Powell urged caution, warning that the Fed isn't ready to declare victory over inflation yet. Hopes for more Fed rate cuts are fading after Powell's latest CPI remarks, which showed progress has "stalled".
- *Tariff Impact*: The Fed expects to learn more about tariffs this summer and will wait for more economic data before making any changes to interest rates.
