Trade Wars Rage, Inflation Bites—And the Fed’s Still Not Blinking

Markets wobble as tariffs and price surges collide—while central bankers cling to hawkish dogma like it’s 2022.

No relief in sight: Powell & Co. double down on ’higher for longer,’ leaving traders scrambling for hedges beyond traditional assets.

Meanwhile, crypto volatility spikes as Bitcoin becomes the unofficial referendum on monetary policy incompetence.

In brief

• Trump wants the Fed to cut rates to offset the effects of his tariff surcharges.
• Powell refuses to act hastily, preferring to observe the evolution of real economic data.
• Tariff tensions fuel inflation, slow consumption, and weaken employment in the short term.

Trump vs Powell: an open war

, the president and Bitcoin enthusiast, does not like waiting. Even less so when it comes from Jerome Powell, the head of the Fed. Since his return to the White House, he has been pounding his fist..

“No inflation, the FED should cut its rate“, he wrote on Truth Social.

. He repeats that the Fed acts based on data, not presidential moods. But the president keeps piling on attacks.

Powell is always TOO SLOW AND TOO BAD.

Behind the scenes,. Yet, Powell is his own choice. To appoint, then want to fire: Trump remains true to his disruptive logic. The context is special.

. Unemployment is rising, markets are agitated. And Trump wants to revive at all costs. For him, the remedy is simple: cut rates, like in Europe.

Tariffs that change the game

But. For good reason. The tariffs imposed by Trump complicate things. 145% on Chinese products. At least 10% on all imports. Even cocoa is over-taxed. The goal?But the immediate result is a price increase. And tension on consumption.

Loretta Mester, former Fed of Cleveland, warns:

Tariffs will at least slow growth.

. Sluggish growth. Imported inflation. Fragile jobs. Belinda Roman adds:

If the Fed cuts rates now, markets will think it is panicking.

And if markets panic, everything can deteriorate very quickly. The Fed hesitates, so it delays. Powell even quotes Ferris Bueller: “life moves pretty fast“.

A wink, perhaps. Certainly a metaphor. We must observe, he says. Not rush decisions. But Trump, he charges ahead.

Figures in hand, the duel continues

The economic terrain is not reassuring.. Record layoffs in April. Inflation steady at 2.4%, far from the 2022 peak, but still uncomfortable. Consumer confidence collapses. The expectations index is at 54.4, a threshold for imminent recession.

Faced with these figures, Trump wants to act. Powell wants to wait. The disagreement becomes public.

Here are the key figures of the moment:

• 4.25% to 4.50%: current rates maintained since December;
• 145%: tariff imposed on Chinese products;
• 105,400: layoffs recorded in April, a post-Covid record;
• 54.4: confidence index, lowest since 2011;
• 2.4%: inflation in March, stable since September.

For Trump, these signals demand an immediate response. For the Fed, they are, not action. This mismatch fuels tensions. And speculation grows. Rate cut or status quo? Both camps hold their positions.

Donald Trump long dreamed of firing Jerome Powell. And he never misses an opportunity to remind everyone of this desire. Pressure is mounting. But will the Fed hold course in the face of this political offensive?

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