Powell Faces Challenges Amid Economic Concerns and Trade Tensions

According to BlockBeats, Federal Reserve Chair Jerome Powell is tasked with reassuring investors about the stability of the U.S. economy while signaling readiness to intervene if necessary during the upcoming interest rate decision. This comes as U.S. President Donald Trump's escalating trade war raises concerns, leading to significant declines in the stock market over the past month. As economic outlook worries grow, consumer confidence and bond yields are also falling. Dominic Konstam, head of U.S. macro strategy at Mizuho Securities, emphasized the need for Powell to signal that the Federal Reserve is monitoring the stock market closely, as officials cannot ignore the recent downturn. Economists generally anticipate two interest rate cuts by the Federal Reserve this year. Some investors caution that if officials continue to signal only two rate cuts in 2025, Powell must stress the Fed's willingness to adjust borrowing costs if labor market issues arise. James Athey, a portfolio manager at Marlborough Investment Management, noted that while the Fed might slightly improve or worsen the situation, they cannot fully calm the market, as the main impact on market sentiment stems from the White House. Beyond the escalating and shifting tariff threats to trade partners, the Trump administration has taken limited steps to mitigate recession risks.