Trump’s Tariff Tantrum: Will Powell Play Nice or Keep the Rates High?

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  • Powell warns tariffs may fuel inflation, complicating Fed’s 2% target.
  • Crypto stocks rebound slightly as the market shows early signs of recovery.

Ah, Wall Street! A veritable circus of chaos, and on the 4th of April, it was no different. Our dear Federal Reserve Chair, Jerome Powell, donned his most cautious demeanor, as if he were about to deliver a eulogy rather than a financial forecast. 🎩

He cautioned that the Trump administration’s delightful little game of “reciprocal tariffs” could very well throw a spanner in the works of the U.S. economy’s recovery. Who knew tariffs could be so entertaining? 🎭

Powell warns of rising inflation

At a public conference, Powell, with all the gravitas of a Shakespearean actor, warned of rising inflation and the specter of slowing growth—just as the Fed’s earlier rate cuts had suggested we might be in for a soft landing. How charmingly optimistic! 🌈

With inflationary pressures now possibly accelerating faster than a cabaret dancer, Powell hinted that the central bank’s 2% inflation target could become as elusive as a good cup of tea in a New York diner. ☕

Powell declared,

“While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent.”

Trump pushes Powell to cut interest rates

Just before Powell took the stage, President Donald Trump, in a fit of social media bravado, took to Truth Social to unleash his thoughts on the Fed Chair. Oh, the drama! 🎭

In his latest post, Trump aimed his verbal cannon at Powell’s leadership, declaring,

“This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates. He is always “late,” but he could now change his image, and quickly. Energy prices are down, Interest Rates are down, Inflation is down, even Eggs are down 69%, and Jobs are UP, all within two months – A BIG WIN for America. CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!”

What are the numbers saying?

Meanwhile, in the land of numbers, investor anxiety over a potential recession has sent U.S. Treasury yields tumbling like a bad soufflé, with the 10-year yield dipping below 4%. How delightful! 📉

This shift reflects growing expectations that the Federal Reserve may ease policy more aggressively than a cat on a sunny windowsill. 🐱

According to the CME FedWatch tool, traders are now pricing in at least four quarter-point rate cuts in 2025—twice the number projected by the Fed just last month. How positively scandalous! 💃

Meanwhile, mixed signals from the labor market are adding to the uncertainty, like a poorly written play. The unemployment rate edged up to 4.2% in March, even as Non-Farm Payrolls beat forecasts with 228,000 new jobs, pointing to lingering economic resilience. Bravo! 👏

Inflation remains the key variable, with the Consumer Price Index rising 2.8% year over year in March, ahead of the latest update expected on the 10th of April. Stay tuned, folks! 📅

Crypto market shows signs of recovery after Tariff shock

After sharp declines earlier in the week, U.S. crypto stocks and digital assets are stabilizing, much like a tightrope walker regaining balance. 🎪

Coinbase and Strategy (MSTR), which were among the hardest hit, are beginning to recover, with MSTR climbing 4.01% to $293.61. A round of applause, if you please! 👏

Mining firms such as Mara Holdings (MARA) also posted a modest rebound, while Riot Platforms (RIOT) remained slightly in the red. Oh, the drama of it all! 🎭

The broader crypto market appears to be regaining its footing as well, with the global market cap edging up to $2.67 trillion—a 0.04% daily increase as per CoinMarketCap. How positively riveting! 💰

Bitcoin [BTC], though still below its peak, is hovering around $83,000, signaling cautious optimism across the digital asset landscape. Let’s raise a glass to that! 🥂

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2025-04-05 16:13