Today, all eyes will be on Federal Reserve Chair Jerome Powell when he speaks at The Economic Club of Chicago on April 16. The market will be keenly watching his upcoming commentary on Wednesday.
Global investors, analysts, and market participants would be looking to Powell for guidance on a number of recent developments. Powell’s comments could shed light on a variety of issues, including tariffs, jobs, inflation, direction of interest rates, and the state of the economy.
U.S. Treasury Secretary Scott Bessent announced Monday that the White House will begin interviewing applicants for the position of Federal Reserve Chair Jerome Powell, whose tenure ends in May 2026.
Powell has been under pressure sort of to bring the interest rates down. Inflation in the US seems to be trending lower. The latest set of US CPI data for March, released on April 10, 2025, showed a falling trend. Whether the US Fed FOMC decides to go for a rate cut in May or wait for June remains to be seen.
“On a more positive note, last week’s inflation data suggested that price pressures are easing, with both CPI and PPI figures coming in lower than expected.
This further reinforced the market’s belief that the Fed could cut interest rates twice by the end of 2025, potentially starting as early as September. Given that high borrowing costs remain a key barrier to corporate growth and stock valuation, expectations of monetary easing serve as an important pillar supporting market sentiment.
However, as recent sessions have shown, these macroeconomic positives may not be sufficient to offset the rising risks from policy and geopolitical fronts,” says Linh Tran, Market Analyst at XS.com
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Trump was always in favour of lower rates and has now put Powell in a spot. Cutting rates soon and aggressively may trigger inflation again, while a delay could hurt the US economy.
Powell, however, along with most other Fed officials, feels the time is not right to cut rates.
The US economy is showing signs of weakness, at least it’s showing up in the job market. But, it looks like the US Fed is likely to maintain a steady policy rate to mitigate the possibility of persistent inflation due to Trump’s tariffs.
The Fed’s March 18-19 meeting released economic projections and a dot plot showing two rate cuts in 2025. Trump’s tariff announcements have increased the likelihood of a US recession, potentially necessitating more or larger rate cuts.
Interestingly, Powell will speak from the same place where Trump visited in October 2024 and talked about high tariffs and the Fed chief position. Today, the world is witnessing the initiation of tariffs, which has sparked a trade war, specifically the US-China trade war.
The economic situation remains uncertain despite a temporary 90-day tariff suspension affecting over 75 countries. The talk of US recession is increasingly becoming louder.
Powell’s commentary today will throw some interesting insights into the state of the economy, tariff impact and the direction of interest rates in 2025.
US Fed chief Powell’s speech can be watched live on the YouTube channel of EconomicClubChicago.
Meanwhile, markets appear sluggish as a result of a halt in the market’s rebound momentum, fueled by hopes of a more supportive Federal Reserve monetary policy. Investors are taking a cautious approach.
“Overall, the S&P 500 remains caught between two opposing forces: hopes for monetary easing and risks stemming from trade and technology policies. For the market to establish a clearer direction, a new catalyst is needed to reignite investor confidence,” adds Tran.