Powell: Don't Ask, I Don't Know Either

The Fed wrapped up its meeting last night. One-sentence summary: hold steady, everything as expected, but Powell himself said take the forecast "with a grain of salt."

Meeting Results
- Rates unchanged: 3.5%-3.75%, no surprises
- Dot plot: median 3.4% (year-end), same as last December → still projecting 1 rate cut this year

The core signal from Powell's press conference this time boils down to one word: uncertainty.

- "Inflation hasn't declined the way we hoped," "Oil price surge is expected to push inflation higher in the near term," "Take forecasts with a grain of salt, uncertainty is extremely high," Regarding his tenure: he will remain until his successor Warsh officially takes office

The Middle East conflict is beyond the Fed's playbook. He himself admitted that making economic forecasts is like shooting in the dark — nobody can see into the future to know what war will bring. As shown in the chart.

JPMorgan Chase fired off a comment at lightning speed, with a straightforward tone: the Fed is ignoring Middle East risks, and its optimistic expectations on inflation and employment may be a miscalculation. JPM's latest forecast: zero rate cuts in 2026, and possibly even a 25bp rate hike in Q3 2027.

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