The Breakdown Powell's Hawkish Wait-and-See
Aug 1, 2025
Tensions between the Federal Reserve and the administration take center stage as Powell holds rates steady. The podcast dives into the fallout from this decision, including hawkish market reactions and dissent among Fed governors. It also highlights a significant new crypto policy roadmap unveiled by the White House, signaling a shift in fiscal dominance. The discussion emphasizes the Fed's waning independence and the evolving landscape of digital assets, raising questions about the future of monetary policy.
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Powell's Hawkish Stance
- Jerome Powell signaled no assurance of rate cuts in September, indicating a hawkish stance amidst economic uncertainty.
- This unexpected tone caused two Federal Reserve governors to dissent, a rare occurrence signaling internal Fed tension.
Rare Fed Governor Dissents
- Dissents from Fed Governors Waller and Bowman, voting to cut rates, show uncommon internal disagreement under Powell's leadership.
- Such dissent hasn't been seen since 1993, reflecting shifting dynamics in Fed decision-making.
Tariff Inflation Uncertainty
- Tariff inflation uncertainty prevents the Fed from confidently cutting rates.
- Powell believes retailers are absorbing tariffs temporarily but might pass costs to consumers later, complicating inflation outlook.