This is a segment from the Forward Guidance newsletter. To read full editions, subscribe . Yesterday, Fed Chair Jay Powell brought back his favorite pandemic-era word: “transitory.” The term, and the Fed’s projections as a whole , didn’t spook investors, surprisingly. Markets initially fared well, but have since pared gains — perhaps a signal that traders are now looking closely at yesterday’s materials. The S&P 500 and Nasdaq Composite closed Wednesday 1.1% and 1.4% higher, respectively. By 2 pm ET on Thursday, however, both indexes were back in the red, trading 0.3% and 0.4% lower, respectively. Median projections show that FOMC members still expect interest rates to end 2025 50bps lower , which should be reassuring to markets. But the committee is now also projecting slower growth, higher inflation, and higher unemployment than what they predicted at the end of last year. President Trump’s tariff plans and layoffs from DOGE are likely major catalysts for the committee’s change of heart. “We now have inflation coming in from an exogenous source, but the underlying inflationary picture before that was basically 2.5% inflation, 2% growth, and 4% unemployment,” Powell said during yesterday’s press conference. Still, though, Powell said “tariff inflation” could be — you guessed it — “transitory,” and therefore the Fed may not have to adjust its interest rate plans. Whether Powell was trying to convince us or himself however is a question only he can answer. Get the news in your inbox. Explore Blockworks newsletters: Blockworks Daily : The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam. Empire : Start your morning with the top news and analysis to inform your day in crypto. Forward Guidance : Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance. 0xResearch : Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more. Lightspeed : Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks. The Drop : For crypto collectors and traders, covering apps, games, memes and more.
