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!

28:06

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Episode guests

Jeff Rosenberg

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Quick takeaways

Fed Chair Jay Powell emphasized a cautious approach to interest rates amid rising economic risks, highlighting the importance of risk management.

The unpredictability of trade policies and tariffs presents significant challenges for the Fed, complicating accurate economic forecasting and communication.

Deep dives

Federal Reserve's Cautious Approach

The Federal Reserve, led by Chair Jay Powell, has chosen a patient and cautious approach amid rising economic risks, emphasizing that current inflation expectations remain anchored. Powell noted that the economy is performing well, suggesting there is no immediate need to adjust monetary policy. The Fed is monitoring ongoing trade negotiations between the U.S. and China, as these could have significant implications for inflation and growth. This cautious stance indicates that the Fed is prioritizing risk management to avoid potential mistakes based on uncertain economic signals.

Intro

2min

Navigating Economic Uncertainties

9min

Navigating Trade Tensions and Economic Uncertainty

12min

Currency Trends and Global Economic Shifts

4min

Navigating Economic Shocks and Market Volatility

2min

Shifting Policies in AI Chip Regulations and Trade Relations

2min

Bloomberg's Tom Keene, Jonathan Ferro and Lisa Abramowicz discuss remarks from Fed Chair Jay Powell following the Federal Reserve's latest policy decision on a special edition of Bloomberg Surveillance.

Federal Reserve Chair Jerome Powell said officials are not in a hurry to adjust interest rates, adding tariffs could lead to higher inflation and unemployment. “If the large increases in tariffs that have been announced or sustained, they’re likely to generate a rise in inflation, a slowdown in economic growth and an increase in unemployment,” Powell said Wednesday at the conclusion of a two-day meeting in Washington. “The effects on inflation could be short lived, reflecting a one time shift in the price level,” he said. But it’s “also possible that the inflationary effects could instead be more persistent.”

Officials voted unanimously to keep the benchmark federal funds rate in a range of 4.25% to 4.5%, where it has been since December. In a statement, policymakers said they see a growing risk of both higher inflation and rising unemployment. “Uncertainty about the economic outlook has increased further,” the Federal Open Market Committee said in a statement. They added, “the risks of higher unemployment and higher inflation have risen.”

The S&P 500 index of US stocks and Treasury yields fell following the announcement, while the dollar pared gains.

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Bloomberg Surveillance

Instant Reaction: Jay Powell on the Fed Decision

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

Federal Reserve's Cautious Approach

Impact of Trade Policies on Economic Outlook

Challenges in Economic Forecasting

Fed's Communication Strategy Amid Uncertainty

Remember Everything You Learn from Podcasts