Federal Reserve Chair Jerome Powell delivered a careful but candid assessment Wednesday, following the Fed’s decision to hold interest rates steady for the third straight meeting. Speaking at his news conference, Powell addressed market uncertainty, rising risks, and the Fed’s approach amid the ongoing tariff shock from President Donald Trump’s aggressive trade moves.

Key takeaways from Powell’s remarks

On the Fed’s mission:

“Our focus is on making the best decisions for the American people.”

On GDP swings and trade data:

“Swings in GDP data won’t really change things for us.”
“Big spike in imports to beat tariffs should reverse in 2Q. Likely net exports to have a large positive contribution to GDP.”

On U.S.-China trade talks (upcoming in Switzerland):

“I can’t weigh in directly… but we’re entering a new phase as the administration kicks off negotiations. Trade outcomes could materially change the picture—or not, but that’s for the administration to do.”
“I think they don’t need my advice—and our advice—on how to do fiscal policy. Any more than we need their advice on monetary policy.”

On national debt:

“The debt is on an unsustainable path.”

On current economic effects:

“We don’t see big economic effects in the data yet; people are worried, but shock hasn’t hit yet.”

On past Fed actions (QE and tightening):

“QE wasn’t beyond the confines of our mandate; we could have explained it better.”
“Didn’t want sharp tightening of financial conditions when economy was vulnerable.”
“On climate, over and over you’ve heard me say Fed’s role is very, very narrow. That’s what we’ve done.”

On future rate path:

“I can’t confidently say I know the appropriate rate path; my gut tells me that uncertainty is extremely elevated.”
“Risks of higher unemployment and higher inflation have risen, but not yet in the data.”

On Trump’s calls for rate cuts:

“Trump calling for rate cuts doesn’t affect our job at all.”

On tariff impact and rate policy:

“Won’t make progress on goals this year if tariffs stay.”
“This is not a situation where we can be preemptive.”
“The 2024 rate cuts weren’t preemptive. If anything, it was a little late.”

Powell’s remarks reinforce the Fed’s cautious stance as it balances inflation risks against economic slowdown fears driven by Trump’s trade wars. Markets will be closely watching upcoming economic data and the U.S.-China trade negotiations in Switzerland to gauge whether the Fed’s next move will be a rate cut or continued hold.