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It's very clear to me that Fed Chair J. Powell and the rest of the Fed remain in this wait and see mode. They want to see how the effects of these now bigger than expected tariffs shake out. And what really struck me was how the Fed chair tried to project calmness. Sort of down playing this a bit, saying, you know, in a year from now, this uncertainty will have lifted and we will know where things stand. Um, this is really he chalked it up to the new administration coming in and making changes in policy. Uh, I also want to point out that the Fed chair seemed to sort of inadvertently answer the president's social media post, uh, which he put out right before Powell spoke, where he said, cut interest rates, Jerome, and stop playing politics. But, uh, Powell says he doesn't feel like they need to be in a hurry right now. They have time, they want to gain greater clarity. And the last thing that stuck out to me is that for those who have said that the president has put the Fed in a bit of a difficult position between a rock and a hard place when it comes to balancing their dual mandate of inflation versus employment, he says, those two are not really in tension right now. This is not a 1970s situation where you really had very high inflation and low growth.

Thank you very much. Um, and Miles, there was definitely a little bit of a cognitive dissonance there between Powell, who was characteristically very even killed, very calm, and then the red that we're seeing on our screens. And he didn't give any solace to people in the market who might have wanted him, although there was not really a chance he would, come in and say he was somehow going to ride to the rescue.

Yeah, I mean, I had three main takeaways. I think the obvious one, which the market immediately hated, uh, Powell's prepared remarks where he has, um, towards the bottom of the speech, the line, 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. A, we're going to wait. Right? And also that we are, this is not an emergency press conference setting. I'm not going to come out here and say anything that you didn't, you know, you were hoping for me to hear, et cetera, et cetera. Uh, and of course, market went to lows of days on those comments. And now we still see S&P and Nasdaq both down 4%, uh, with a couple hours ago in the trading session, four hours ago in the trading session. He also then said, as Jen referenced in the Q&A, that we are not in a hurry. Um, I think that, I mean, look, we're chatting about it in the newsroom. You could make the argument. I know yesterday there were some folks saying, oh, now the Fed's going to cut four times this year. I mean, he left the door open to raising rates this year as much as he did to more aggressive rate cuts. Is the Fed going to raise rates this year? I would be very surprised, but the way that Powell outlined in his prepared remarks, specifically, his assessment of what we've learned in the last 48 hours, is exactly where he's wanted to be, which is room on both sides to move. And I think the real emphasis on inflation is going to change maybe some of that thought around how the Fed, you know, how the reaction function may come through in this moment. So, we have inflation expectations, we have he's not in a hurry. And then there was another moment that maybe it comes, maybe it doesn't mean anything, but he referred to, you know, in other crises. So, like, is this a crisis now? Right? I think, like, Right? Like, we are now in a position where, um, Powell is very good at saying very little. But he's also pretty honest, and he's also pretty relaxed, I think, in in that kind of a setting. I mean, he clearly was, you know, as you would expect, most comfortable of the three on the stage. But like, he let that slip or he just does, he's like calling it like it is. I mean, the market's down 7% in a couple of days. To me, that feels like a crisis. It does feel like a crisis. But I'm not the Fed chair, so I can just say that. But he even acknowledging we could be in that situation, I think, um, is showing just how fragile this moment is. Right? And he said also, you know, he he acknowledged the tough spot that the Fed is in when he said, you have risks for high unemployment, you also have risks for higher inflation. And he said, that's not a place that the central bank wants, that's not a position that we want to be in. It's an uncomfortable place for a central bank to be in. So that also sort of acknowledges, um, the limits of what they're able to do if that indeed ends up being the case more than it is now.

Right.

I was struck by that as well. Yeah.

Yeah. Yeah.

Yeah.

Right.

Yeah.

Yeah, particularly since, uh, we came into this year with, I think, and he referenced in the Q&A that, you know, we have to focus on whichever side of the mandate is more pressing at any one point in time, um, which I also took as implying as his speech, I think made clear, we came into this year, the labor market was the discussion. How, you know, how much unemployment will the Fed tolerate? Now, this morning's numbers are like, I I mean, I guess they don't have to worry about that. Right? Unemployment's still 4.2%. But we've now had a Fed that, I think, left 24 with a view to, we've mostly accomplished our inflation goals, we can begin easing, we've been in restrictive policy, let's kind of let the cycle normalize in 25. And now they're ripping up the script and once again turning back to the inflation side of the mandate, which has given them plenty of challenges over the last few years.