#PowellRemarks

📌 Key Highlights

Rates Held Steady at 4.25–4.50%

The Fed kept its benchmark rate unchanged—the fourth pause since December 2024—as Powell emphasized that “a meaningful amount of inflation” is still expected, largely due to delayed tariff effects.

Tariffs & Inflation Lag

Powell noted that inflation could rise with the pass-through of tariffs into consumer prices, a process that remains “very uncertain.” The Fed is committed to observing data closely before adjusting rates.

Projected Two Cuts This Year, But…

The Fed’s updated “dot plot” still indicates two potential rate cuts in 2025. However, Powell emphasized this outlook is conditional on incoming data. Forecasts:

GDP growth: ~1.4%

Unemployment: ~4.5%

Inflation (PCE): ~3% by year-end

Cautious, Data-Driven Approach

Powell stressed the Fed isn’t on “autopilot”—they’re neither ruling out more cuts nor hikes. All decisions are data-dependent.

Defying Political Pressure

Despite public pressure from President Trump calling for quick cuts (even calling Powell "stupid"), the Fed signaled its independence. Powell emphasized decisions are based on economics, not politics.

Outlook & Risks

Inflation risks may rise from geopolitical tensions and tariffs, even as labor markets stay strong. Powell said the Fed would wait for data clarity before moving, with market expectations pointing to possible rate cuts around September.

🔍 Implications

For Borrowers & Consumers: No near-term relief on interest rates—loan, credit, and mortgage costs remain stable.

For Investors: Mixed market reactions—Treasury yields rose slightly, equities remained cautious amid global and inflation concerns.