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

[u/Force_Hammer]

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

[u/jasonridesabike]

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.

[u/AverageLatino → u/jasonridesabike]

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.

[u/mongoosefist → u/AverageLatino]

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.

[u/an_exciting_couch → u/mongoosefist]

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

[u/LuminousRaptor → u/an_exciting_couch]

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.

[u/733t_sec → u/LuminousRaptor]

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

[u/j33205 → u/LuminousRaptor]

Trump can only pick from the sitting Fed Governors

well at least

[u/yonkssssssssssssss → u/LuminousRaptor]

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

[u/LuminousRaptor → u/yonkssssssssssssss]

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

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

[u/KriosDaNarwal → u/mongoosefist]

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

[u/mongoosefist → u/KriosDaNarwal]

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

[u/snark42 → u/mongoosefist]

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.

[u/jasonridesabike → u/AverageLatino]

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.

[u/Same-Brilliant2014 → u/AverageLatino]

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

[u/superbigjoe007 → u/jasonridesabike]

Lol, Fed "independence"

[u/pagerussell → u/superbigjoe007]

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

[u/jasonridesabike → u/pagerussell]

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.

[u/ModestGenius66 → u/jasonridesabike]

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