Inflation Remains Above Target
💹 Jerome Powell confirmed that inflation is still stubbornly high above 2%, despite months of tightening.
📌 The Fed will stay patient, ensuring inflation trends down before considering any cuts.
🔶 The Fed’s Dual Mandate Stands Firm
⚖️ Powell stressed the dual mandate: keeping prices stable and employment strong.
📢 No rush to cut rates until economic data shows clear improvement.
🔶 Economic Growth is Slowing
📉 Data indicates moderation in U.S. growth:
Consumer spending is softening.
Manufacturing shows mixed signals.
Employment is cooling but remains historically strong.
💡 This “slow but steady” economy supports a hawkish pause, not an immediate cut.
🔶 Tariffs Add Inflation Risks
📦 Powell acknowledged new tariffs on certain goods:
May add short-term price pressures.
Broader impact remains uncertain, requiring more data before action.
🔶 Bonds & Yields React Cautiously
📊 Treasury yields jumped initially but then settled:
10‑year yield: 4.34%
2‑year yield: 3.87%
🔑 Bond markets signal "higher for longer" rates but no panic selling.
🔶 Stock Market Stays Resilient
📈 U.S. equities remained stable to slightly positive:
S&P 500: +0.2%
Nasdaq: +0.4%
Dow Jones: +0.1%
💼 Investors believe the Fed may still cut later this year, but not in September.
🔶 Gold Slips on Hawkish Fed
🥇 Gold fell ~1% to $3,288/oz as:
The U.S. dollar strengthened.
Higher yields made non-yielding gold less attractive.
Support sits at $3,280, with resistance at $3,334.
🔶 Crypto Faces Risk-Off Selling
🪙 The crypto market dropped ~4–5%:
Bitcoin: ~$116K (‑0.6%)
Ethereum & XRP: Down 2–3.5%
Solana & other altcoins: Heavier losses as risk appetite shrinks.
💡 A stronger USD and Powell’s stance added macro pressure on digital assets.
🔶 U.S. Dollar Strengthens
💵 The greenback climbed sharply, squeezing gold, crypto, and emerging market currencies.
Markets are bracing for a hawkish Fed for longer than expected.
🔶 September Meeting: All Eyes on Data
📅 Powell made it clear: No pre-commitment for September.
Labor market and inflation data will decide the Fed’s next move.
Rate cuts are not imminent but possible later in 2025 if data allows.
💡 Bottom Line:
The Fed is staying hawkish for now. Stocks held steady, bonds stayed firm, gold slipped, and crypto dropped sharply.
👉 Until the September FOMC, every CPI, jobs, and growth data release will drive markets.
