Powell’s warnings about U.S. trade policy trigger market response
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Federal Reserve Chairman Jerome Powell stated yesterday, during an event at the Economic Club of Chicago, that the continued rise in U.S. trade tariffs and the uncertainty surrounding the situation could severely damage the American economy, which is already experiencing slowed growth and rising unemployment levels.
Powell also emphasized that the Fed hasn’t faced such a situation in nearly fifty years, and that the speed at which political and trade dynamics are shifting is unprecedented in modern times. During Powell’s speech, U.S. stock markets saw significant declines: the Dow Jones dropped by 1.7%, the S&P 500 fell 2.5%, and the Nasdaq Composite declined by 3.5%.
He also pointed out that the current environment makes it extremely difficult for the Fed to fulfill its mandates — promoting full employment and managing inflation — due to the political and economic uncertainty caused by the Trump administration’s tariffs. According to Powell, the Fed will need to wait for further data that could provide a clearer picture of the U.S. economy’s outlook before making any policy decisions.
Additionally, analysts believe Powell’s remarks clearly indicate the Fed’s intention not to cut interest rates at this time.
Powell also emphasized that the Fed hasn’t faced such a situation in nearly fifty years, and that the speed at which political and trade dynamics are shifting is unprecedented in modern times. During Powell’s speech, U.S. stock markets saw significant declines: the Dow Jones dropped by 1.7%, the S&P 500 fell 2.5%, and the Nasdaq Composite declined by 3.5%.
He also pointed out that the current environment makes it extremely difficult for the Fed to fulfill its mandates — promoting full employment and managing inflation — due to the political and economic uncertainty caused by the Trump administration’s tariffs. According to Powell, the Fed will need to wait for further data that could provide a clearer picture of the U.S. economy’s outlook before making any policy decisions.
Additionally, analysts believe Powell’s remarks clearly indicate the Fed’s intention not to cut interest rates at this time.