Powell: Don't Expect the Fed to Step in to Rescue the Market, Trump Changes Every Day

Federal Reserve Chairman Powell said on Wednesday that the market's expectation that the Fed would step in to calm volatility might be misguided. When asked if the Fed would intervene in response to the sharp decline in the stock market, Powell stated, "My answer is no, but I will provide an explanation." Speaking at a conference in Chicago, Powell said, "I think the market is digesting the current situation, and it is dealing with a lot of uncertainty, which means volatility." Powell noted that given the significant changes in President Trump's tariff policy, it is understandable that the market would face difficulties. He also explained that it is hard to know in real-time what is causing the trouble. Powell remarked, "I have had a lot of experience with significant market volatility, like in the bond market. Usually, people form an idea, and two months later, they look back and find that their initial view was completely wrong. So, it is too early to definitively say what is happening in the market now." Currently, he pointed out that part of the market turmoil is due to hedge funds reducing leverage or debt, and added, "In the short term, you may continue to see market volatility."