r/wallstreetbets • u/Force_Hammer • 1d ago

News Powell sees tariffs raising inflation and says Fed will wait before further rate moves

https://www.cnbc.com/2025/04/04/powell-sees-tariffs-raising-inflation-and-says-fed-will-wait-before-further-rate-moves.html
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966

u/Esqualatch1 1d ago

Rates cuts are 100% off teh table

527

u/erick1160 1d ago

Rate hikes on the table.

245

u/Waygzh 1d ago

In a market where there's guaranteed 10-60% inflation imminent, aren't rate hikes the only solution?

Just rug pull this shit, 5 point rate hike effective immediately. Rates are currently 5% below the minimum tariff implemented by Trump.

246

u/jasonridesabike 1d ago

Fed only acts on hard data and predictions on hard data. They don't respond to politics. It's by design, if they did otherwise it would jeopardize fed independence. JPow made that point very clearly in the speech and I believe to address these sorts of calls to action.

The fed isn't acting until blood is in the streets, one way or the other; and stagflation implies hike.

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u/AverageLatino 22h ago

As they should, the remaining trust in the american economy is due to the Fed independence and reliability, but I do wonder if JPowell will have to pull a Volcker if needed.

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u/mongoosefist 22h ago

He would be negligent not to at this point.

Trump is going to nominate a chair that will be leading the fed in exactly a year, and although the Fed **should** be independent, you'd have to be very naive to believe the next chair won't be a puppet.

If jpow doesn't go full Volcker this inevitable recession is going to turn into a full blown depression.

31

u/an_exciting_couch 21h ago

Wait JPow only has a year left and then Trump gets to pick the next Fed chair? Holy shit we're so fucked

24

u/LuminousRaptor 20h ago edited 15h ago

Trump can only pick from the sitting Fed Governors, so his only choices would be Waller or Bowman if he wanted to change out Powell.

Waller would probably be Trump's pick if I were a betting man. He's a fiscal dove, but he was also one of the first to call for hikes in 2021. So, who knows.

25

u/733t_sec 18h ago

Hear me out though, what if he just chooses Jared Kushner anyway

9

u/j33205 19h ago

Trump can only pick from the sitting Fed Governors

well at least

3

u/yonkssssssssssssss 15h ago edited 15h ago

Not quite, Kugler’s seat will be up next year too so there will be an opening for him to nominate someone for. And it’s Waller, not Walker

2

u/LuminousRaptor 15h ago

You're right, I forgot about Kugler and damn autocorrect!

I've fixed Waller's name in the OP from Walker.

11

u/KriosDaNarwal 21h ago

is 1 year, 3 quarters realistically enough to go full volcker? Also if he does, trump will blame the bad economy on him

22

u/mongoosefist 21h ago

If he cranked up interest rates 5% per meeting, he could stop inflation in its tracks. The economy is cooked regardless, but if rates were something like 15% this time next year we'd certainly have one less problem to deal with

4

u/snark42 19h ago

You'd have to be very naive to believe the next chair won't be a puppet.

New chair might very well be a puppet, but there are 6 other Governors (including Powell for awhile) and 5 Fed Presidents that get to vote on rate direction.

Chair could end up dissenting for the first time in 100 years if he acts as a puppet.

16

u/jasonridesabike 22h ago

In my view it's inevitable that we'll see hikes if the tariffs aren't removed either mostly or entirely within a year. Could definitely be faster, but I see it as at most a year.

So the Q becomes: do the courts intervene (and if so does Trump obey), does GOP grow a spine, does Trump declare victory and stop? If no to all then hikes and potentially severe hikes IMO. I don't think any are reasonably predictable right now.

1

u/Same-Brilliant2014 2h ago

Don't worry we'll lose that last bit of trust in 2026, when jpows gone😬

1

u/superbigjoe007 16h ago

Lol, Fed "independence"

1

u/pagerussell 13h ago

Yea, OP fooling himself. Trump will fire j pow within the next 90 days.

1

u/jasonridesabike 13h ago

Can’t and JPow has already stated he wouldn’t leave if he tried. We have until May 2026 iirc when JPow´s term ends.

0

u/ModestGenius66 10h ago

Fed screwed it massively last time. But hey, “dAtA”

35

u/Severan_Mal 22h ago

Jpow has 3 options:

  1. Hike rates because inflation -> affordability crisis & lagging investment leads to recession
  2. Cut rates to avoid lagging economy -> inflation reaches crisis point, leads to recession
  3. Keep rates stable -> leads to recession

We’re in a unique spot where we’ll probably have high inflation without the economy-supporting demand & consumption that usually come with it. Even if demand lowers in the US because of an American recession, prices probably won’t fall - the rest of the world will likely be selling at the same prices, and we’ll have less money & be tariffed to shit.

2

u/SoberBobMonthly 15h ago

Yeah I think anyone arguing for these tarrifs seems to forget that each of us outside the US has had our own beefs with other countries and tarrifs before.

My favorite was when red wine became cheap as shit here in Australia for a while and we got to enjoy some decent plonk because of a trade spat with China that has since cleared up.

Like, yeah sure there will be some harms for us in other ways I'm sure, but this politics shit is impossible to predict or plan for and we all accept that its not going to make sense. And the result in the immediacy is that a lot of goods for the rest of us here are going to get much cheaper.

The main things we got from the US included machinery, vehicles, and electronic components. We might have to reduce our consumption of those things or get them elsewhere, and honestly, maybe we should have been doing that already. We need to boost our domestic manufacturing, and when the Greens here say they are happy with munitions factories on shore, you know things are fucked.

10

u/briefcase_vs_shotgun 23h ago

This is why the fed is run by adults. Yes rug interest rates…

6

u/_xX-PooP-Xx_ 1d ago

Nahhh this is the US fed. Quantitave Easing back on the menu, fire up those money printers boys.

3

u/drewbagel423 1d ago

Inflation to the moon

1

u/hawkeye224 21h ago

We'll just use stocks as currency, you could buy an apple for 0.001 share of Apple

3

u/Jhah41 23h ago

No because when you hike rates jobs disappear. Jobs also will disappear as consumer spending drops die to tariffs in the short/medium term. Canadian here, but it's extremely likely we cut and accept the devaluing of our currency instead. Like blackjack against a face card, you can lose now or lose later.

2

u/Chris_M_23 23h ago

I’m no economist but if we fall into recession wouldn’t the fed drop rates to encourage spending?

4

u/neurocellulose 22h ago

That's the shit part about stagflation (recession with inflation). Rate cuts help one side but hurt the other, and vice versa. Typically they prioritize dealing with inflation and accept there'll be higher unemployment and slower growth short term.

1

u/lolas_coffee 22h ago

Hmm...well I do like rug pulls.

1

u/Reactance15 21h ago

Transitory.

Transitory to death knell.

1

u/melb_grind 20h ago

rug pull this shit, 5 point rate hike

Hardcore

1

u/Waygzh 20h ago

Certainly you know what I mean, as most people do. 500 points, if you're trying to be pedantic.

1

u/JamboreeStevens 20h ago

Except the inflation, like the inflation of the last 4 years, isn't due to an increase in money leading to producers charging more, it's due to mfs being greedy and increasing prices while those prices are already skyrocketing due to Trump's first term tariffs, which also happened to cost the US around 250k jobs.

1

u/SplashOfCanada 19h ago

Don’t forget the economy will be shrinking all the way through those rate hikes as well!

1

u/isospeedrix 16h ago

rate hike would a fkin LOL lets fkin gooooo

1

u/ModestGenius66 10h ago

Why not 600% Or 6000? I am sure written the way it will make you feel better.

0

u/R3M1T 23h ago

10-60% inflation imminent? What world are you in? A recession is more likely

3

u/AlarmedCockroach3147 1d ago

Skirt hikes on the table instead

2

u/HamsterDry5273 20h ago

Hope the fed isn’t stupid enough to treat tariff stagflation with rate hikes. Tariffs reduce economic output and rate hikes will reduce it further. Depression would happen almost immediately. 

0

u/HG21Reaper 1d ago

Are the rate hikes in the room right now?

1

u/Tha_Sly_Fox 23h ago

Yeah that’s the craziest part. 4 rate cuts were pretty much priced into markets a few days ago, and now we have analysts saying there may now be a rate hike lol

1

u/Special_Loan8725 19h ago

None of us are gonna be able to afford shit anyway might as well bump up rates to make it less attractive for private equity to buy everything up.

3

u/windowpanez 23h ago

Quantitative Easing baby!

2

u/MetaCalm 22h ago

Not sure why this is suggested. The expected inflation isn't a product of increased demand to be curtailed by higher rates.

If anything US is, headed for stagflation requiring lower rates to incentivize investment in the post tarrif era.

2

u/LeaveItFor7Days 17h ago

The fed is reactionary, not anticipatory. The admin keeps delaying tariffs. Until the track record of teriffs exists (creating the stagflation), the fed will not drop rates for fear off the admin dropping tariffs after getting rates where they want them.

The stagflation must happen first. And that only happens after the tariffs have time to decimate demand.

1

u/FoolOfAGalatian 5h ago

The last time the US had stagflation they did not choose that approach. Why would you think they'd choose to do it differently?

1

u/MetaCalm 5h ago edited 3h ago

Bcs it took so long to come out of it ever since they prevent it by lowering rates and quantitave easing.

1

u/FoolOfAGalatian 2h ago

They most certainly have not chosen to engage either policies when facing stagflation. There hasn't been stagflation since Volcker smashed it in the 80s.

I'm not seeing how you exit an inflation issue by creating more of it with lower rates and QE.

1

u/Tylanthia 1d ago

Time for a firing. Catturd is now chair

1

u/Rabbit-Hole-Quest 23h ago

Even the table is off the table.

1

u/Dozekar 22h ago

I don't know how people don't see this. Rate cuts and we're all currency trading in world of warcraft gold for currency stability increases.

-15

u/fuzz11 1d ago edited 1d ago

There will, at a minimum, be two rate cuts this year. Highest likelihood is 4

Edit: downvote me all you want, this stuff is already all public info: https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

9

u/bld44 1d ago

At this rate, 2 rate hikes this year sounds more believable.

-6

u/fuzz11 1d ago

The you should make that bet, because there is a 0.5% chance of just one. Two hikes is virtually impossible

0

u/Even-Watercress9024 23h ago

They ain’t gonna be hiking rates during a global recession

1

u/fuzz11 22h ago

That’s my whole point here. They are going to cut rates. Original commenter has no idea what they’re talking about

4

u/xeio87 1d ago

There is no such thing as a minimum. A forecast is not a mandate, it's at best a guess and can change.

-1

u/fuzz11 1d ago

Then you should make a big bet against it because it’ll pay off massively if we hike rates at all this year

3

u/MainMedicine 23h ago

Where can I make this bet?