A federal investigation into Fed Chair Powell, pushed by Trump over alleged 'crime' regarding Fed renovations and interest rates, creates uncertainty about Powell's chairmanship and potential extended Board tenure, despite Senate Republican support.
The Fed faces inflation challenges amidst trade tensions and economic uncertainty. Tariffs, energy costs, and labor market rigidity influence the Fed's cautious approach to rate cuts. Stagflation remains a risk.
Powell addressed tariffs, stating the Fed will 'wait and see'. He highlighted the central bank's focus on economic data, inflation risks, and maintaining price stability amid trade policy changes and Trump's criticism.
