Powell Won the Fight

SP500

Key zone: 6,600 - 6,650

Buy: 6,700 (on strong positive fundamentals); target 6,850-6,900; StopLoss 6,620

Sell: 6,600 (on a pullback after a retest of the 6,650 level); target 6,450; StopLoss 6,680

The Federal Reserve stood as a united front against Trump’s encroachment on the independence of the monetary regulator. The Fed confidently decided to lower the interest rate, showing rare unanimity. Out of all FOMC members, only one vote was against—Trump’s protégé Steven Miran, who insisted on a 0.50% cut.

That vote can hardly be counted at all, since Miran is still not officially a Fed member—he never resigned from his previous position at the White House.

It remains a mystery how Powell, under Trump’s round-the-clock pressure, managed to secure consensus with the president’s “friends”—Waller and Bowman. But such effective political diplomacy deserves respect.

No commitments for further rate cuts appeared in either the accompanying statement or Powell’s press conference answers.

In short, Jay stated the following:

• Unemployment remains low, but job growth is slowing.
• Risks of weakening employment are increasing.
• GDP decline reflects weaker consumer spending.
• Signs of sustained inflation growth are fading.
• The balance of risks has shifted, and the Fed is ready to respond in a timely manner.
• Rate decisions will be made at each meeting.

Powell also placed responsibility for labor market slowdown and rising goods inflation (+1.2% since the start of the year) on Trump’s immigration policy. In addition, he supported BLS data revisions on employment.

In effect, the Fed Chair hinted at recession risk but proposed only gradual rate cuts toward a neutral level, without extra support measures. And the Fed sees Trump himself as the main beneficiary of this risk.

What makes Trump especially uneasy is the fact that Powell could remain on the Fed’s Board of Governors even after his chair term ends in May 2026—meaning the president would lose a seat at the regulator.

The initial market reaction was emotional: stocks fell sharply, the dollar weakened, but then stabilized. The Fed’s decision was expected, so the reaction was sharp but ultimately led to a classic “sell the rumor, buy the fact” pattern.

By morning, a second wave followed: stock index futures gained 0.3–0.7%. However, this does not alter the medium-term trend—the market still intends to move upward.

So we act wisely and avoid unnecessary risks.

Profits to y’all!