Federal Reserve chair hesitant to cut rates, causing market losses

From Yahoo Finance: 2025-04-04 16:28:00

Federal Reserve Chairman Jerome Powell is hesitant to change interest-rate policy, not seeing a rate cut as necessary yet. President Trump wants immediate action, criticizing Powell’s pace. Stock markets suffered significant losses after Trump’s tariff announcement, raising concerns about economic impacts. The Fed may need to act sooner than expected due to escalating issues.

Market sentiment turns bearish as layoffs increase, consumer spending slows, and businesses struggle to plan for the future. Major companies like Costco, Tesla, and Walmart see stock prices drop. Powell believes the Fed should wait before making any moves. Tariffs may lead to global retaliation and economic turmoil, echoing the Smoot-Hawley Tariff disaster of 1930.

Emergency Fed meetings can be called if necessary, recalling past actions to combat inflation and stabilize the economy. Historical examples include drastic interest rate hikes and emergency rate cuts to address crises. The Fed’s response to the current situation may determine economic stability in the face of uncertainty.

Read more: Markets can’t wait forever for Fed interest-rate cuts