'Fed is confused' - Analyst on Chairman Powell's speech

Record ID: 1988337

  • Title: 'Fed is confused' - Analyst on Chairman Powell's speech
  • Date: 4th April 2025
  • Summary: NEW YORK, NEW YORK, UNITED STATES (APRIL 4, 2025) (REUTERS) (SOUNDBITE) (English) INFRASTRUCTURE CAPITAL ADVISORS, CEO, JAY D. HATFIELD, SAYING: “We think the Fed's next move is they'll probably pause at the next meeting, but by then, shortly thereafter, we believe that the employment market will weaken and the Fed is really terrible at processing inflation data, but they'
  • Embargoed:
  • Keywords: Donald Trump Fed Powell analyst
  • Location: VARIOUS
  • City: VARIOUS
  • Country: US
  • Topics: Budget/Taxation/Revenue,North America,Government/Politics
  • Reuters ID: LVA004435004042025RP1
  • Aspect Ratio: 16:9
  • Story Text:President Donald Trump's new tariffs are "larger than expected," and the economic fallout including higher inflation and slower growth likely will be as well, Federal Reserve Chair Jerome Powell said on Friday (April 4), while cautioning it was still too soon to know what the right response from the central bank ought to be.
    He made the comments at a business journalists' conference in Arlington, Virginia.
    “Powell's speech indicated that the Fed is confused about how to deal with tariffs,” said Jay Hatfield, CEO of Infrastructure Capital Advisors.
    Powell said the Fed has time to wait for more data to decide how monetary policy should respond, but the central bank's focus will be on ensuring that inflation expectations remain anchored, particularly if Trump's import taxes touch off a more persistent jump in price pressures.
    "While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent," Powell said.
    Hatfield said he does not anticipate a recession in the near term. “We're forecasting 0 to 1% growth, and we don't think it’s going to be a recession this year,” he said. However, he cautioned that “if the Fed remains on hold throughout the year, then we almost certainly would have a recession.”
    Hatfield said he expected “at least three” rate cuts this year.
    Powell spoke as global markets continued a swoon that has wiped some 10% off major U.S. stock indexes since Trump announced a raft of new tariffs on trading partners around the world on Wednesday (April 2). Hatfield's market outlook remains ‘neutral’ to ‘negative’.
    "Uncertainty is high," Powell said in response to a question from the event moderators that expanded on his prepared remarks.
    Hatfield agreed. “The Fed chair was right, indicating we're at maximum uncertainty right now,” said Hatfield.
    (Production: Brendan McDermid, Kyoko Gasha)
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