Federal Reserve Chair Jerome Powell delivered a speech at the University of Chicago Booth School of Business during the 2025 U.S. Monetary Policy Forum in New York. Powell emphasized the importance of patience regarding interest rate cuts. He said the central bank is not in a hurry to lower rates because there is still a lot of uncertainty about the new administration’s policy changes in trade, immigration, fiscal policy, and regulation.
Powell mentioned the recent jobs report, which showed an increase of 151,000 jobs in February, slightly higher than January’s 125,000. The unemployment rate rose to 4.1% from 4%. He noted that the labor market is still strong and balanced.
Powell highlighted the uncertainties caused by the Trump administration’s policies, noting that changes are happening not only due to tariffs but also in immigration, regulation, and fiscal policy. “The new Administration is making significant policy changes in trade, immigration, fiscal policy, and regulation,” Powell said. The Fed has time to wait for clarity on these shifts.
His speech came at a time when stock markets and bond yields were declining due to President Donald Trump’s announcements of steep import tariffs on Mexico, Canada, and China, followed by delays in implementing them. Powell acknowledged the potential slowdown in consumer spending and the uncertainty among businesses.
Despite these challenges, key indicators remain strong, with progress on inflation and continued job gains. The Fed is expected to keep its benchmark interest rate steady at its upcoming meeting. Investors now expect the Fed to approve three rate cuts by the end of the year due to concerns about an economic slowdown.
Impacts of Report on Stock market
On Friday, several Wall Street firms, including JPMorgan, Goldman Sachs, and Morgan Stanley, lowered their growth targets due to concerns about restrictive trade and immigration policies. Powell acknowledged the potential slowdown in consumer spending and the increased uncertainty among businesses. He emphasized that key indicators remain strong, with ongoing progress on inflation and continued job gains.
Investors are now more concerned about an economic slowdown and expect the Fed to approve three rate cuts by the end of the year.
The S&P 500 index rose after Powell’s speech because investors found his remarks reassuring. Despite acknowledging uncertainties and potential slowdowns, Powell emphasized that key economic indicators remain strong, with ongoing progress on inflation and continued job gains. This positive outlook helped ease concerns about an economic slowdown and boosted investor confidence.
