Stock Market Explodes as Fed Chair Confirms What Many Feared; Tariffs Are Already Raising Your Bills

CLEVELAND 13 (WCTU) — The U.S. stock market hit its first record high of the year on Friday after Federal Reserve Chairman Jerome Powell signaled the central bank may be preparing to shift course on interest rates. Powell’s remarks came during the annual Federal Reserve conference, where investors closely monitored his comments for clues on future monetary policy.

“With policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance,” Powell said. The statement fueled investor optimism that the Fed could lower rates in the coming months, sparking a market rally.

Powell also addressed the economic impact of tariffs, saying the costs are being borne by U.S. consumers and businesses rather than foreign countries. “The effects of tariffs on consumer prices are now clearly visible,” he said. “We expect those effects to accumulate over coming months, with high uncertainty about both timing and amounts.” He explained that tariffs take time to move through supply chains, meaning Americans may see higher costs gradually rather than all at once.

The chairman cautioned that President Donald Trump’s evolving tariff policy has made it difficult to predict the long-term inflation outlook. While the best-case scenario would be a one-time increase in prices, Powell acknowledged the risk that tariffs could lead to recurring price hikes, pushing inflation higher over time.

Beyond trade policy, Powell expressed concern about the labor market. “While the labor market appears to be in balance, it is a curious kind of balance that results from a marked slowing in both the supply of and demand for workers,” he said. He noted that this unusual situation points to rising downside risks, warning that layoffs and higher unemployment could materialize quickly if conditions worsen.

Factors contributing to labor market strain, Powell said, include uncertainty surrounding tariffs, high interest rates limiting employer borrowing, and fewer available workers, which he linked to immigration restrictions.

Despite the risks of inflation, Powell emphasized the Federal Reserve’s focus on employment, indicating that concerns about job losses could weigh heavily in the Fed’s decision-making process. He dismissed suggestions that political pressure from the White House would influence the central bank, reiterating that monetary policy is determined by data, not presidential demands.

The Federal Reserve is scheduled to make its next interest rate decision in mid-September, a move that will be closely watched by markets, businesses, and households across the country.

---------------

At Cleveland 13 News, we strive to provide accurate, up-to-date, and reliable reporting. If you spot an error, omission, or have information that may need updating, please email us at tips@cleveland13news.com. As a community-driven news network, we appreciate the help of our readers in ensuring the integrity of our reporting.