The Fed just sent another clear message and it’s one the market can’t ignore.
Jerome Powell has doubled down on the 2% inflation target, calling it the backbone of long-term economic stability. But this time, he pointed a finger at something unexpected: tariffs.
According to Powell, a big chunk of the recent inflation overshoot isn’t coming from demand or wages it’s coming straight from tariff pressure filtering into supply chains. Higher import costs → higher consumer prices. Simple, but painful.
For traders, this shifts the mood. It means policy could stay tighter for longer than the market hoped. Rate cuts may still come, but not as aggressively as risk assets want.
And when uncertainty rises, volatility wakes up.
Equities feel it first. Crypto feels it faster.
This is the kind of macro environment where small data surprises can spark big moves. Keeping an eye on inflation prints, PPI, and tariff-related policy updates could open some sharp short-term opportunities as markets reprice the Fed’s stance.
The message is subtle but strong: inflation is still the enemy, and Powell isn’t looking away.