#PowellRemarks

On April 16, 2025, Jerome Powell, the Chairman of the U.S. Federal Reserve, delivered a speech at the Chicago Economic Club, warning that the tariff policies pursued by President Donald Trump could lead to rising inflation and slowing economic growth, putting the central bank in a difficult position regarding interest rate decisions.

Key statements from Powell:

• Impact of tariffs: Powell pointed out that the imposed tariffs are greater than expected, which could lead to increased inflation and slowed economic growth.

• Interest rate policy: Powell confirmed that the Federal Reserve can hold off on making any decisions regarding interest rates while monitoring the effects of current economic policies.

• Market impacts: His statements led to a sharp decline in financial markets, with the S&P 500 index dropping by 2.2% and the Nasdaq index by 3.1%.

• Financial markets: Despite the volatility, Powell indicated that financial markets are still operating in an orderly manner, and the Federal Reserve will not intervene unless serious disruptions occur.

Reactions:

Powell's statements raised concerns among investors, especially amid escalating trade tensions between the United States and China. Some Federal Reserve officials also expressed differing views on how to handle the current economic situation.