Trump “Lashes Out” at Jerome Powell. Tariff Fears Keep Tugging Markets

The stock market moved lower yesterday due to NVIDIA (NASDAQ:NVDA) reporting a $5.5 billion charge from tariffs, and other chip companies also seeing big hits from the trade war. The S&P 500 had a small recovery post-market and early in the morning, but has been trending lower after markets opened.

Investors are again looking for more clarity on where the economy is heading. The lack of any major news so far this morning has caused the stock market to remain slightly in the green, but it may again turn negative later on due to certain companies reporting a slowdown and further hits from tariffs. The Federal Reserve’s Jerome Powell made some important comments yesterday, and we’ll get into that in a bit.

Here’s a market update as of 10:00 A.M (ET) today.

• The S&P 500 is up 27.01 points, or 0.51%.
• The Nasdaq Composite is up 55.83 points, or 0.34%.
• The Dow Jones Industrial Average is down 499.48 points, or 1.26%.

What Jerome Powell Said Yesterday

President Donald Trump wasn’t happy and “lashed out,” according to The Wall Street Journal.

The Fed’s Chair Jerome Powell said that the Fed is waiting for more data on the economy’s direction before changing interest rates. He did not say they were “pausing,” but rather that the Fed was going slower on cutting interest rates.

In a question-and-answer session, he did admit that there could be a stagflationary situation where tariffs push up prices and growth comes down with a weaker labor market.

Here are some notable quotes from his speech:

• “Despite heightened uncertainty and downside risks, the U.S. economy is still in a solid position.”
• “Inflation has come down a great deal but is running a bit above our 2 percent objective.”
• “The labor market appears to be in solid condition and broadly in balance and is not a significant source of inflationary pressure.”
• “Progress on inflation continues at a gradual pace, and recent readings remain above our 2 percent objective.”
• “The level of the tariff increases announced so far is significantly larger than anticipated. The same is likely to be true of the economic effects, which will include higher inflation and slower growth.”
• “Tariffs are highly likely to generate at least a temporary rise in inflation. The inflationary effects could also be more persistent.”
• “Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem.”
• “We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension.”
• “For the time being, we are well-positioned to wait for greater clarity before considering any adjustments to our policy stance.”

Trump’s Response

Here are some comments President Donald Trump made afterwards:

• “The Fed should have lowered interest rates long ago.”
• “Powell’s termination cannot come fast enough.”
• “The US is getting rich on tariffs.”
• “Jerome Powell is always too late and wrong.”

In the meantime, polls have shown that U.S. consumers expect more inflation. The CPI 2025 inflation outlook was revised upward by the most since March 2023. The recession probability for the coming year is 45% according to the poll, and the economy is expected to grow 1.4% in 2025 and 1.5% in 2026 vs 2.2% and 2.0% in March.

Other Assets

• Gold is down 0.5% today after a rally yesterday.
• Crude Oil Futures are up 1.14%.
• Natural Gas Futures are flat.
• Bitcoin is up 0.4% to $84.290.

The image featured at the top of this post is ©federalreserve / Flickr.