Powell Sees US Growth Slowing and Inflation Rising
Jerome Powell weighed in on the state of the US economy Wednesday, and while the Fed is holding rates steady, its chairman’s outlook wasn’t entirely reassuring. Unsurprisingly, he pointed to Donald Trump’s polices as one reason why inflation is reigniting. The central bank sharply reduced its 2025 growth projection and Powell noted that uncertainty around the slowing economy is increasing. “Inflation has started to move up,” he said, adding that “there may be a delay in further progress over the course of this year.”
Powell was, as always, more modulated, saying recession odds have moved up but aren’t high. He pointed to so-called soft data as a concern, but pushed back against a University of Michigan survey showing a sharp increase in long-term inflation expectations. In as much as markets today looked to Powell for direction, the takeaway was that things could be worse. Here’s your markets wrap.
In the day or so since US Supreme Court Chief Justice John Roberts appeared to scold Trump for his attacks on the judiciary, a flurry of lower court decisions were less subtle in taking the 78-year-old president to task for firing thousands of government employees, effectively shuttering federal agencies and limiting the rights of minorities. All of those actions—according to federal judges—were likely in violation of the US Constitution and federal statute. But as the number of lawsuits, court defeats (and more than a few wins) accumulate for Trump, so too are cases in which his lawyers are flouting judicial authority. The question of a constitutional crisis may at this point be a moot one, as some scholars say it’s already arrived. The real question is what happens next.
Benjamin Netanyahu is following up on his sudden ending of Israel’s ceasefire with Hamas by sending troops back into the decimated Gaza Strip, with soldiers returning to positions outside population centers as the embattled prime minister vows to continue until all hostages are released. During the short truce, Hamas freed some 38 hostages, most of them alive, in return for more than 1,000 Palestinians imprisoned by Israel. But talks between the warring parties have been at a stalemate. Israel has reportedly killed hundreds of Palestinians in the days since the ceasefire was breached, adding to the more than 48,000 whom Hamas health officials said have been killed ...
