Ultimate summary of Powell’s comments today

As expected, Powell reiterated that the Fed is in no rush to adjust rates, and the labour market is stable.

He also reaffirmed the Fed’s reliance on hard data over sentiment and the approach of slowing balance sheet reduction.

What’s different this time:

Inflation & tariffs: Powell acknowledged that recent inflation upticks may be tariff-driven, delaying progress toward price stability. The Fed’s base case assumes tariff inflation is temporary.

Economic sentiment: Consumer sentiment has weakened, partly due to Trump policy changes, and concerns over inflation are growing.

Recession risk: Forecasts now lean toward weaker growth and higher inflation, with recession risks slightly elevated but still not high.