Fed Confidence Hits Rock Bottom – Markets Brace for Powell’s Next Move
Confidence in the Fed is collapsing. Gallup’s latest survey shows only 37% of Americans trust Jerome Powell’s ability to manage the economy - the lowest in years and a sharp fall from the 58% approval he enjoyed back in 2020.
This drop isn’t just about sentiment. It’s about credibility. Inflation is still above target, growth is slowing, and now the public is questioning whether the Fed can steer us through without breaking something.
At Jackson Hole, Powell hinted that an “adjustment” may be needed — code for rate cuts ahead. The reaction was instant:
The dollar slipped,
Treasuries rallied,
Stocks bounced after a shaky week.
But here’s the catch: if the labor market rebounds in September, cutting too early could ignite inflation again. Bank of America even warned the Fed risks a “policy error” by easing prematurely.
Meanwhile, politics is heating up. Trump slammed Fed board member Lisa Cook and is already shaping the central bank’s future leadership with his allies. Traders are watching closely — Fed independence looks shakier than ever.
For markets, this means one thing: volatility isn’t leaving anytime soon. Bonds are flashing warning signs, long-term yields are under pressure, and both equities and crypto will be hypersensitive to every Fed headline.
As traders, we need to treat Powell’s signals carefully. The next cut might spark relief, but without trust in the Fed, rallies won’t last unless backed by real fundamentals.
• Bottom line: the Fed is losing credibility fast, politics is creeping into monetary policy, and that makes the path ahead even more unpredictable. Stay nimble, manage risk, and don’t get caught leaning too heavily on one narrative.
