Will Powell Signal Trouble? S&P 500, Gold, and Dollar Face Big Test
A Reuters poll found nearly 60% of economists believe tariffs have increased inflation risks. If Powell acknowledges this concern, markets could react with higher Treasury yields, a stronger dollar, and downward pressure on equities, particularly in rate-sensitive sectors.
Powell to Defend Fed’s Independence Amid Political Pressures
Beyond inflation and trade policy, Powell may face scrutiny over the Fed’s independence. Former President Trump has criticized Powell’s decisions and suggested increasing White House influence over monetary policy. While Powell has defended the Fed’s autonomy, any signs of political interference could unsettle markets.
Regulatory matters, particularly the Basel III Endgame capital requirements for large banks, may also come up. Lawmakers, including Senator Elizabeth Warren, have raised concerns over the Fed’s supervisory role, adding another layer of uncertainty.