Risk sentiment took a sharp blow Wednesday afternoon after Federal Reserve Chair Jerome Powell linked rising tariffs to higher inflation and slower growth, while making it clear the central bank has no intention of cushioning market losses.
In remarks at the Economic Club of Chicago, Powell said the inflationary effects of tariffs could be more persistent than previously thought, and warned that current policy uncertainty makes it difficult to gauge their full impact.
Most notably for Wall Street, Powell addressed the notion of a so-called “Fed put”—the belief that the central bank would intervene if markets drop sharply—and offered a blunt response: “I’m going to say no.”
That single line pushed traders to recalibrate expectations for any near-term monetary support.
Stocks Tumble As Chipmakers Extend Losses
By 3:15 p.m. ET, the S&P 500 – as tracked by the SPDR S&P 500 ETF Trust (NYSE:SPY) – had dropped 3.1% to 5,230 points, while the …