(Reuters) -The United States will not rush to reduce interest rates while waiting for greater clarity about how new Trump administration policies affect the economy, said the president of the Jerome Powell Federal Reserve at the New York Economic Forum on Friday.
Powell spoke at an unstable time, with shares markets and bond yields that were declining after the announcement of President Donald Trump on Whipsaw -steep imported tariffs on the main trade partners Mexico and Canada, followed by delays in their implementation. Trump also doubled tariffs on imports from China.
Market reaction:
Stocks: S&P 500 compared the loss and was switched off 0.06%
Bonds: US Treasury 10-year-old yield revealed 1.3 BP more per day at 4.295%
Forex: The dollar index tagged, but it was still from 0.25% of late Thursday
Comments:
Lindsey Bell, main market strategist, Clearnomics, New York
“Powell gives a sense of calm to a market that is moving very wrong. He said the economy is in a good place, and inflation is still anchored despite some survey data.”
“What Powell does today is to give the market a sense of direction. It is a missing market that has been a significant direction because of the tariff aside and back, watching, from Trump’s administration.”
“The fact that it is calm and composed is much better than the hard tone we get from Trump’s administration around the tariff, around Doge (Department for Government Efficiency) and State Consumption.”
“Investors are catching up for something that gives them a better understanding of what is happening. The picture is a very clear picture. This tariff uncertainty is real … The market can respond suddenly to the news, but the economic outcome can be much less significant.”
“Less reduction of the rate is currently less concerned with markets than the tariff of economic influence could potentially impose on the economy. Because of Powell’s economy assessment in a good place. Investors find comfort in this.”
Tony Roth, Cio, Wilmington Trust Investment Advisors
“The Fed will be very conservative in what they say until we know whether they are tactic or strategic tariffs, and if they turn out to be strategic, they will continue to wait while claiming data show that inflation is low, and the economy is in the recession before they got two comparisons. Strategically, I would say that we are probably in a recession in the next three months.”
