Fed Holds Rates Steady Amid Tariff Uncertainty

The Federal Reserve has decided to maintain its benchmark interest rate at 4.25%-4.5%, marking the third consecutive hold this year. This decision reflects the Fed's cautious stance in the face of escalating tariff policies and their potential to disrupt economic stability.

Powell's Warning: A Delicate Balance Between Inflation and Growth

Fed Chair Jerome Powell highlighted the dual risks posed by current tariff policies: rising inflation and a slowdown in economic growth. "The risks to higher inflation, higher unemployment have increased," Powell stated, underscoring the heightened economic uncertainty.

Market Reactions and Future Outlook

Wall Street interpreted Powell's remarks as a stagflation warning, with the S&P 500 index experiencing volatility during his press conference. Despite initial gains, the market's reaction underscored the delicate balance the Fed must navigate in the coming months.

Political Pressures and Fed's Independence

Amid calls for rate cuts from political figures, Powell reaffirmed the Fed's commitment to data-driven decision-making. "We're always going to consider only the economic data, the outlook, the balance of risks," he asserted, dismissing any influence from political pressures.