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CNBC’s Jim Cramer explained why an uncertain macroeconomic environment led the Federal Reserve to hold interest rates steady — dashing the hopes of many investors and President Donald Trump.
“In short, the backdrop’s just too darned mixed for the Fed to take action,” Cramer said. “That’s also why Powell pretty much punted on that forecast, because who knows what the heck the future’s going to like? Certainly not the Federal Reserve, which is why they’re so reluctant to make a move until they know more.”
Stocks slipped on Wednesday as investors digested Fed Chair Jerome Powell’s comments. Powell said higher tariffs have affected the prices of some goods, but their overall impact on the economy and inflation remains unclear. While he did say it’s possible tariff-induced inflation could be “short lived,” he also warned that the new duties could lead to “more persistent” inflationary changes.
“Our obligation is to keep longer term … inflation expectations well anchored and to prevent a one-time increase in the price level from becoming an ongoing inflation problem,” Powell said.
