Summary of Key Points from Powell's Speech on April 16

Wallstreetcn
2025.04.16 18:30
  1. Federal Reserve Chairman Jerome Powell hardly mentioned the FOMC's monetary policy outlook, stating that the FOMC is ready and is waiting for more certainty regarding U.S. President Trump's tariff policies.
  2. Without price stability, a strong labor market cannot be achieved. Forecast data shows that March PCE inflation rose to 2.3%, with a core inflation rate of 2.6%.
  3. The labor market appears to be solid and generally in balance. It is unclear how extensive the layoffs at Elon Musk's Department of Efficiency (DOGE) are. There is currently no (balancing) conflict between the two policy goals of full employment and price stability.
  4. Even in the most optimistic scenarios from the FOMC, President Trump's tariffs exceed expectations.
  5. A regulatory framework for stablecoins is needed. It is expected that there will be a relaxation of regulations on the banking industry regarding cryptocurrency issues.
  6. The capital status of the banking system is good and quite resilient. Certain small and medium-sized banking institutions have a high concentration in commercial real estate (CRE). In my personal opinion, the U.S. should complete the implementation of Basel III.
  7. The independence of the Federal Reserve is granted by U.S. law. The (Trump administration) cannot dismiss Federal Reserve officials without reason. I fear that the U.S. Supreme Court's ruling (favoring Trump's layoffs) does not apply to the Federal Reserve
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