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Powell on Rates and Tariffs: The Fed is Ready to Maintain a Tough Stance
Fed Chair Jerome Powell noted in his speech on April 16 at the Economic Club of Chicago that recent tariff initiatives could increase inflationary pressures and impact the labor market. According to him, the regulator lacks confidence that inflation is consistently moving toward its target level.
In this regard, the Fed may keep current interest rates longer than previously expected. Powell emphasized that if necessary, the regulator is ready to tighten conditions to keep inflation under control.
Markets reacted with declines: the S&P 500 lost 2.2%, the Nasdaq fell by 3.1%, with the technology sector facing the most pressure due to new export restrictions to China.