Jerome Powell’s Last Masterstroke

The swansong of Jerome Powell is here, and it would be more of a landmark moment. The decisions so far have been more of a walk on a tightrope. It was one of the important terms of any Fed chief in recent history. This is mainly due to the many curveballs thrown and how each time Powell took them in stride and avoided any significant damage to the US economy. And with the last meeting, the odds of swaying toward anything unusual.

As per many experts in the financial markets, the decision is likely to be “a pause” in the interest rate movements. This is what many are expecting from the meeting. With the US economic growth looking resilient, the fiscal expenditure looks all the more deteriorated. The debt levels have been on the rise since the pandemic period, and they have not seen any respite from it ever since. This situation got all the more aggravated with Trump’s second term and the growth of the AI revolution. The fiscal deficit now amounts to 6% of the US GDP; it remains to be seen what measures are going to be implemented next by the new Fed chief nominated by President Trump.

US GDP Growth over the last 3 years

Powell’s Final Decision

As expected, the US Fed chief and his team have finally decided to “pause interest rate movements." This looks like a welcome move from the market experts and economists. The reasons are predominantly driven by the disturbance in the Middle East and the rise in oil prices. From the looks of it, the board members have decided to wait and watch the movements within the economy before taking a call on what to do next. To add to all this, new tariffs under Trump’s administration and higher supply chain disruptions and oil prices do not seem plausible for any cuts. Cuts are likely not going to make it any time soon in 2026, as energy prices, especially oil, continue to soar high, as it last recorded $107-$108 a barrel, closing on Saturday, 25th April 2025. With the inflation pegged at 3.3% YoY as of March, the US Fed would likely act more vigilantly going forward to keep its core economic indicators in check.