Bloomberg Surveillance

Instant Reaction: Jay Powell on the Fed Decision 

May 7, 2025
In this engaging discussion, Jeff Rosenberg, BlackRock's Investment Strategist, shares keen insights into the turbulent economic landscape. He analyzes Fed Chair Jay Powell's cautious approach to interest rates amidst rising tariffs and inflation risks. Rosenberg emphasizes the impact of trade tensions on productivity, urging for portfolio diversification. He highlights the delicate balancing act policymakers face and underscores the importance of effective communication in managing economic uncertainties. Tune in for valuable perspectives on navigating today's unpredictable markets!
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INSIGHT

Fed Emphasizes Patience Amid Trade Uncertainty

  • Fed Chair Jay Powell emphasizes patience in adjusting interest rates due to economic resilience and trade uncertainties.
  • Risks of higher inflation and unemployment exist, but the cost of waiting for clearer data is low.
INSIGHT

Fed's Cautious Approach to Tariffs

  • The Fed is uncertain about the impact of tariffs on growth and inflation due to unprecedented scale and unknown consequences.
  • This uncertainty leads to a cautious 'do no harm' policy approach.
INSIGHT

Fed's Late Response Risks

  • Fed's delayed rate cuts last year reflected a late response to evident economic risks.
  • Acting late leads to rapid, larger rate cuts to correct course.
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