$SPDR S&P 500 ETF Trust(SPY)$ crashed almost 5% in 2 hours because JPOW said bad things about economy.
Here's 10 things he said everyone missed but insanely important:
1. “Tariffs will likely raise inflation and slow growth.”
Stat: Tariffs announced are “larger than anticipated.” Businesses have increased imports early in Q1 2025 to beat tariff hikes, dragging GDP forecasts down.
2. “Inflation is falling, but still above 2%.”
Stat: Headline PCE inflation is at 2.3%, Core PCE is 2.6% YoY (March 2025).
3. “Labor market is solid but job growth is slowing.”
Stat: U.S. added ~150,000 jobs/month in early 2025, down from 2024’s pace.
4. “Higher inflation and higher unemployment may happen together.”
Stat: Fed is preparing for stagflation-like conditions (inflation + job losses).
5. “AI could massively impact productivity—or job losses.”
Stat: Powell said AI could be one of the top 3 global economic drivers over the next 20 years.
6. “U.S. fiscal policy is unsustainable.”
Stat: Federal debt is rising sharply even at full employment. Interest payments are now one of the top 4 U.S. spending categories.
7. “Supply chain risks from tariffs could trigger longer inflation.”
Example: Car companies may face multi-year delays in parts due to China tariffs, echoing semiconductor shortages during COVID.
8. “Immigration slowdown is now limiting worker growth.”
Stat: Immigration has “fallen sharply” under the current administration. Worker supply growth has stalled.
9. “The Fed is not here to rescue the stock market (no Fed Put).”
Stat: Powell said volatility is high but markets are functioning normally. VIX has spiked, but no intervention is planned.
10. “Uncertainty is the #1 thing freezing the economy right now.”
Quote: A business leader told the Fed: “I’ve never felt more uncertain in my 40-year career.”
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