#PowellRemarks What’s New in Powell’s Remarks

1. Rising Tariff-Driven Inflation

Powell made it clear that tariff impacts will build over the summer, warning that consumers will eventually pay higher prices as duties are passed through the supply chain .

2. Heightened Uncertainty & “Flying Blind” Tone

He emphasized that policy decisions now hinge on rarely seen levels of uncertainty, calling the outlook the “least unlikely” path and stressing the Fed’s data-dependent stance amid unknowns like tariffs, oil spikes, and geopolitical risks .

3. Revised Economic Projections (“Dot Plot”)

Inflation: Forecast raised to around 3% by year-end, remaining above target into 2026.

Growth: Downgraded — GDP now projected to grow only ~1.4% this year.

Unemployment: Expected to rise modestly to ~4.5% .

Notably, 7 out of 19 FOMC members now see no rate cuts in 2025, reflecting a doubting minority .

4. Delayed Rate Cuts & Duration Outlook

Although still penciled in for two quarter-point cuts this year, the Fed hinted at a slower pace for future easing (2026–27). Powell added that they’d only begin cutting once the tariff inflation outlook becomes clearer, keeping September as the earliest realistic window .

5. Hawkish Market Tone & Fed Independence

Markets reacted to his cautious and hawkish language—stocks were flat to mixed, bond yields ticked higher—and with added political pressure, Powell reaffirmed the Fed’s independence .

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⚖️ Bottom Line

Powell’s latest message:

Tariff-induced inflation is on the rise.

The Fed is data-first, not date-driven.

Economic outlook is softer (growth down, inflation up, unemployment inching higher).

Rate cuts are no longer certain, with a more cautious, longer timeline expected.

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Would you like:

A comparison of this Fed outlook vs. other central banks?

An analysis of how this impacts asset classes (e.g., equities, bonds, dollar, gold)?

A calendar tracking key data/events that could shift Powell’s view?

Let me know! 😊