Federal Reserve Chair Jerome Powell's Inflation Warning Shakes Markets

Stock markets across the United States faced significant downturns this Wednesday, following alarming remarks by Federal Reserve Chair Jerome Powell. Powell highlighted the potential for President Donald Trump's tariffs to fuel more persistent inflation than initially anticipated, casting a shadow over market optimism.

Powell's Cautious Stance on Inflation and Employment Goals

During his speech in Chicago, Powell expressed concerns over the possible clash between the Fed's inflation and employment objectives. He emphasized the need for careful evaluation of how far each target is from being met and the timeframe required to bridge these gaps, signaling a cautious approach to future monetary policy decisions.

Market Reactions and Currency Fluctuations

By 1:39 pm ET, the Dow Jones Industrial Average had dropped by 1.10%, shedding 442 points, while the S&P 500 and Nasdaq 100 experienced losses of 1.70% and 2.53%, respectively. In currency markets, the euro saw a 0.91% increase against the dollar, trading at $1.13834 at the same time.