This week, Powell faces a challenging task of reassuring investors that the USA economy remains strong while also signaling a readiness to intervene if necessary.

Recent anxiety caused by Trump's tariffs has led to a stock market crash over the past month. As concerns about the economic outlook have increased, Bonds yields have also decreased, and Consumer confidence has declined.

For the market, what investors are most concerned about is whether the Federal Reserve will commit to lowering interest rates if signs of economic weakness emerge. Bloomberg analysis suggests that Powell may avoid making such a commitment.

Unless accompanied by an important premise: officials need to see inflation consistently moving towards their 2% target, and expectations for future price increases must remain stable.

Dominic Konstam, the head of macro strategy at Mizuho Securities USA, stated: "Powell needs to send some sort of signal that they are monitoring the situation." He warned that while the Federal Reserve Chair may clearly state that officials are not targeting the stock market, they cannot ignore the recent decline.

Tariff policy uncertainty: business and Consumer confidence are being undermined.

The market generally expects that the Federal Reserve will maintain interest rates at the meeting on March 18-19, but investor concerns over growth have resurfaced and they have begun to anticipate three interest rate cuts in 2025, most likely starting from June. However, Powell and his colleagues are facing the same uncertainties as investors.

Last Sunday, Trump downplayed the question of whether his radical tariff policies could lead to an economic recession during a Television interview, claiming that reforms to the trade system would bring long-term benefits. As a result, the market fell in response. The S&P 500 Index dropped for the fourth consecutive week, entering a corrective Range along with the Nasdaq Composite Index, down 10% from recent highs.

Meanwhile, the widely watched Consumer confidence Index from the University of Michigan fell to a 29-month low of 57.6 in March, down from 64.7 the previous month. The uncertainty of policies is driving market panic, leading to concerns about growth prospects.

This makes it unlikely for Powell to deviate from his recent wait-and-see attitude. In a speech earlier this month, he stated that sentiment Indicators are often not strong guides to actual economic activity, and policymakers can wait for a clearer outlook.

"The risk of rising inflation leads us to believe that despite the recent weakness in the stock market, the chance of seeing 'Powell Put Options' in the coming week is very small," stated Stephen Brown, deputy chief economist at Capital Economics, in a report.

"For the Federal Reserve, the issue is that the increase in layoffs driven by policy will be accompanied by rising inflation due to policy."

Kevin Gordon, a senior investment strategist at Charles Schwab, stated:

"I think the nature of policy-making is far more serious than the tariffs themselves. Many companies are beginning to say, 'If there are going to be tariffs, then that's fine—just tell me what the tariffs are and don't change them.'"

Gordon is concerned that businesses will cut back on spending, hiring, and other activities, leading to an economic slowdown and potentially a recession.

James Athey, the portfolio manager of Marlborough Investment Management, stated:

“Marginally, the Federal Reserve may improve the situation slightly or make it worse. But obviously, they cannot fully appease the market, as this sentiment shock largely comes from the White House.”

Get a sneak peek at important financial events and discover investment opportunities early! Open Futubull > Market > US Stocks >Financial Calendar/Selected macro data., seizing investment opportunities!

Editor/rice