Summary of Fed Chair Powell’s May 7, 2025 Speech

 

Here’s a bucketing  of Fed Chair Jerome Powell’s key comments from his May 7, 2025 speech:

🏦 Monetary Policy Stance

• The Fed held interest rates steady at 4.25%–4.5%.

• Powell stated the Fed is not in a rush to cut rates, emphasizing a "wait and see" approach.

• Any future rate changes will be data-dependent.

📉 Inflation & Growth Outlook

• Inflation remains stubborn, though progress has been made.

• The economy shows moderate growth, but new trade tensions may impact future performance.

• There are concerns that tariffs could fuel inflation and dampen growth, raising stagflation risks.

🌐 Tariff Impact

• Powell highlighted uncertainty from newly imposed and proposed tariffs.

• Tariffs are viewed as a supply-side shock, potentially increasing prices.

• Extended tariff regimes could delay inflation progress and rate cuts.

🧭 Fed Independence & Credibility

• Powell rejected political pressure (notably from President Trump) to cut rates.

• Reaffirmed the Fed's independence and commitment to its dual mandate: stable prices and maximum employment.

• Said political comments "really don’t affect" monetary policy decisions.

Fed faces uncertainty on rate cuts, tariffs impact; expects higher inflation. Policy cautious, awaiting more data to decide on next steps.

Powell data dependent and the future is still uncertain.Pay attention to geopolitical tension when opening a gold position.