- Powell warns tariffs may fuel inflation, complicating Fed’s 2% target.
- Crypto stocks rebound slightly as the market shows early signs of recovery.
As Wall Street faced a second consecutive day of turmoil on the 4th of April, Federal Reserve Chair Jerome Powell struck a cautious tone.
He warned that the Trump administration’s push for “reciprocal tariffs” could throw a wrench into the U.S. economy’s recovery path.
Powell warns of rising inflation
Speaking at a public conference, Powell flagged the potential for rising inflation and slowing growth—just as the Fed’s earlier rate cuts had suggested signs of a soft landing.
With inflationary pressures now possibly accelerating in the quarters ahead, Powell hinted that the central bank’s 2% inflation target could become harder to sustain in an increasingly uncertain policy landscape.
Powell said,
“While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent.”
Trump pushes Powell to cut interest rates
Just ahead of Jerome Powell’s remarks, President Donald Trump took to Truth Social to criticize the Fed Chair, making it clear he wasn’t holding back.
In his recent post on Truth Social, Trump aimed direct shots at Powell’s leadership and said,
“This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates. He is always “late,” but he could now change his image, and quickly. Energy prices are down, Interest Rates are down, Inflation is down, even Eggs are down 69%, and Jobs are UP, all within two months – A BIG WIN for America. CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!”
What are the numbers saying?
That being said, this week, investor anxiety over a potential recession has sent U.S. Treasury yields tumbling, with the 10-year yield dipping below 4%.
The shift reflects growing expectations that the Federal Reserve may ease policy more aggressively than previously forecast.
According to the CME FedWatch tool, traders are now pricing in at least four quarter-point rate cuts in 2025—twice the number projected by the Fed just last month.
Meanwhile, mixed signals from the labor market are adding to the uncertainty.
The unemployment rate edged up to 4.2% in March, even as Non-Farm Payrolls beat forecasts with 228,000 new jobs, pointing to lingering economic resilience.
Inflation also remains a key variable, with the Consumer Price Index rising 2.8% year over year in March, ahead of the latest update expected on the 10th of April.
Crypto market shows signs of recovery after Tariff shock
After sharp declines earlier in the week, U.S. crypto stocks and digital assets are stabilizing.
Coinbase and Strategy (MSTR), which were among the hardest hit, are beginning to recover, with MSTR climbing 4.01% to $293.61.
Mining firms such as Mara Holdings (MARA) also posted a modest rebound, while Riot Platforms (RIOT) remained slightly in the red.
The broader crypto market appears to be regaining its footing as well, with the global market cap edging up to $2.67 trillion—a 0.04% daily increase as per CoinMarketCap.
Bitcoin [BTC], though still below its peak, is hovering around $83,000, signaling cautious optimism across the digital asset landscape.