Episode summary
Instant Reaction: Jay Powell on the Fed Decision | Bloomberg Businessweek
Bloomberg Businessweek Daily
· · 29 min · Hosts: Tom Keene, Jon Ferro, Carol Massar, Tim Stenovec · Guests: Jerome Powell
Summary
The Federal Reserve left interest rates unchanged and kept the median dot pointing to one rate cut this year, but Jerome Powell sounded more cautious about the path ahead. He said officials need to see more progress on inflation before resuming cuts, especially in goods inflation, and repeatedly stressed that it was too soon to judge the economic impact of the Middle East shock and higher oil prices. The market took the comments as more hawkish, with equities weaker and front-end Treasury yields moving higher.
Powell also spent unusual time on his own future, saying he would stay on as chair until a successor is confirmed and would not leave the board while the Justice Department investigation is unresolved. That answer prompted a sharp market reaction and raised questions about Fed independence and the legal mechanics of succession. The discussion framed the moment as one of unusual uncertainty: tariffs have complicated the inflation picture, energy prices could add another layer, and policymakers appear determined to wait rather than guess.
Key takeaways
- Jerome Powell said the Fed needs further inflation progress, especially on goods prices, before it can resume cutting rates.
- The median Fed forecast still pointed to one cut this year, but the market interpreted the press conference as more hawkish.
- Powell said it is too soon to know the full economic effect of the Middle East shock and higher oil prices.
- Powell said he would remain chair until a successor is confirmed and would not leave the board while the DOJ investigation continues.
- The reaction in markets was immediate, with equities weaker and shorter-dated Treasury yields moving higher.
Notable quotes
“I would serve as chair prom until he is confir confirmed”
“I have no intention of leaving the board until the investigation is well and truly over with transparency and finality”
“I have not made that decision yet”
How the episode opens
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Bloomberg Audio Studios. Podcasts radio news. — This is a breaking news update from Bloomberg. Instant reaction and analysis from our 3,000 journalists and analysts around the world. — The chairman of the Federal Reserve. If there was a good meeting to scrap the forecast, then this one was probably it. The chairman deemphasizing the projections, re-emphasizing the uncertainty, focused on the shock in the Middle East. We had one question. How would they respond to it?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- fed decision
- interest rates
- rate cut outlook
- inflation and tariffs
- geopolitical uncertainty
Watch the episode
Watch “Instant Reaction: Jay Powell on the Fed Decision | Bloomberg Businessweek” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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