Jerome Powell to Address Economic Concerns at Chicago Event

Perhaps most importantly this week, Federal Reserve Chair Jerome Powell will be delivering an important monetary policy speech at the Economic Club of Chicago on Wednesday afternoon. The address, slated to begin at 1:30 p.m. ET, is expected to focus on the current economic landscape, particularly the impact of President Donald Trump’s tariffs on markets and inflation.

As the markets remain on edge regarding the repercussions of these tariffs, Powell’s remarks are anticipated to provide clarity on the Federal Reserve’s stance. As we know from his inflammatory past statements, Trump’s tariffs can unambiguously increase inflation and reduce economic growth. Investors and analysts are eagerly awaiting clues that could impact monetary policy expectations in the coming months.

The Federal Open Market Committee (FOMC) next meets on May 6-7. They’re likely to shape their public communications around their new short term, overnight borrowing target. Market participants are almost unanimous in their expectations that the FOMC will hold the rate steady in the 4.25% to 4.50% range. This expectation is in line with Powell’s signaled preference for the Fed to proceed cautiously before making any further moves on rates.

Given all of the above, Powell’s speech was an important signal ahead of next week’s FOMC meeting. It provides an opportunity for him to address current economic risks and reassure markets about the Fed’s readiness to adapt its policies as necessary. In fact, Fed Governor Christopher Waller has dismissed the inflationary effects of tariffs as ’transitory.’ He likened it to a ‘tush push,’ signaling that this is a short-term digression not a long-term trend.

Speakers at the Economic Club of Chicago have included many of the most powerful people in the country. It’ll provide Powell a wider pulpit from which to address these at times seething economic demands. Just as Janet Yellen suggested at the beginning of her tenure, markets are acutely sensitive to any change in monetary policy. His speech will have a huge impact on investor sentiment especially going into the FOMC meeting.