Forex Analysis & Reviews: 07.04.2025 - Jerome Powell Is Not Ready...

InstaForex Loprais Team - Official participant of the Dakar rally

This section features the most important information about trading with InstaForex. We provide both analysis from leading experts for experienced traders and articles on trading conditions for beginners. Our services will help increase your profit potential.

Become Trader

Account Opening

See also

Trading Conditions

Forex Analytics

Charts

This section is designed for those who are just starting their trading journey. InstaForex educational and analytical materials will meet your training needs. Our experts' recommendations will make your first steps to trading success simple and clear.

Start as Beginner

How to start trading

Useful information

Training and recordings

InstaForex innovative services are an essential element of productive investment. We strive to provide our clients with advanced technical capabilities and make their trading routine comfortable as we are recognized as the best broker in this regard.

Become Investor

PAMM System

ForexCopy System

Passive investments

OYS account

Partnership with InstaForex is beneficial and top-tier. Join our affiliate programs and enjoy bonuses, partner rewards, and the possibility to travel with the team of the world-renowned brand.

Become Partner

Main Page

Partner Area

Advantages for Affiliates

Registration

This section contains the most lucrative offers from InstaForex. Receive bonuses when topping up an account, compete with other traders, and get real prizes even when trading in a demo account.

All Promo Campaigns

Bonuses

Contests

Events

Holidays with InstaForex are not only pleasant but also useful. We offer a one-stop portal, numerous forums, and corporate blogs, where traders can exchange experiences and become successfully integrated into the Forex community.

Full details

Forums

We are in social networks

Forex humour

Forex Portal

InstaForex is an international brand created in 2007. The company provides services for online FX trading and is recognized as one of the world's leading brokers. We have won the trust of more than 7,000,000 retail traders, who have already appreciated our reliability and focus on innovations.

Learn More

History

Why Choose Us

InstaSport

Regulation

Company News

Awards

InstaForex Stars

InstaForex Offline

Headquarters

Key documents

Social Responsibility

InstaForex Loprais Team - Official participant of the Dakar rally

07.04.2025 11:11 AM

Jerome Powell Is Not Ready to Intervene

Investors were deeply disappointed when Federal Reserve Chair Jerome Powell made it clear during his Friday speech at the end of last week that he does not intend to intervene in the current market developments.

According to Powell, the U.S. central bank will not rush to respond to the Trump administration's broad tariffs or to the market turbulence triggered by fears of a global economic downturn. While the tariffs are expected to have a significant impact on the U.S. economy—slowing growth and increasing inflation—Fed officials have decided to wait for greater clarity on Trump's new policies before lowering interest rates.

The market responded immediately. Powell also emphasized that since inflation remains high, the Fed must ensure that the temporary price increases driven by tariffs do not become entrenched.

It is now evident that the Fed is not in a position to offer the kind of economic "insurance" it provided during the 2018–2019 trade war, as inflation remains above target. The Fed's apparent hesitation could result in the U.S. economy falling into a recession in the second half of the year. At that point, the central bank is likely to take action, as there will be more clarity about the trajectory of inflation and the global economy's reaction to Trump's protectionist measures.

"Although the level of uncertainty remains high, it is becoming clear that the scale of the tariffs will be significantly larger than expected," Powell said at the annual conference of the Society for Advancing Business Editing and Writing. "Our responsibility is to keep long-term inflation expectations anchored and to ensure that a one-time price level increase does not evolve into a persistent inflation problem," he added.

In his view, the Fed is in a favorable position to wait for more clarity before considering any adjustments to its policy stance. Powell noted that the central bank's tools can either slow or stimulate the economy, and a choice between the two will be necessary if both inflation accelerates and growth weakens.

Powell's remarks also indirectly point to the Fed's readiness to make broader use of its monetary policy tools, which could include not only interest rate adjustments but also changes to the size of its balance sheet. However, economists remain divided on the long-term implications of such a policy. Some believe decisive action is needed to stabilize prices and prevent an inflationary spiral, while others worry that keeping rates high for too long could slow economic growth and trigger a recession.

It is worth noting that the Fed's next meeting is scheduled for May 6–7. Traders in the futures markets, who had assigned about a 50% chance of rate cuts, reduced those odds to around 30% following Powell's comments.

As for the current technical outlook for EUR/USD: Buyers now need to focus on breaking above the 1.1020 level. Only then can they target a test of 1.1090. From there, a move to 1.1145 is possible, although reaching that without support from major players would be difficult. The final target would be the high at 1.1215. If the instrument declines, major buying activity is expected around the 1.0950 zone. If buyers don't step in there, it would be wise to wait for a retest of the 1.0890 low or open long positions from the 1.0845 level.

As for the technical picture for GBP/USD: Pound buyers need to push through the nearest resistance at 1.2950. Only then can they aim for 1.2990, although breaking above that level will be challenging. The ultimate target would be the 1.3040 level. If the pair falls, the bears will try to take control around 1.2870. If successful, a breakdown of that range could deal a serious blow to bullish positions and push GBP/USD down toward the 1.2830 low, with the potential to reach 1.2760.

You have already liked this post today

*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.