Fed Chair Powell Drops Bombshell: Near-Zero Rates Gone for Good?

Hang onto your hats, crypto fans! Federal Reserve Chair Jerome Powell just threw down the gauntlet, warning that the days of near-zero percent interest rates might be ancient history. Brace yourselves for a wild ride in the U.S. markets!

On a stormy Thursday, May 15, Powell unleashed a warning about incoming "supply shocks" that could force interest rates to stay sky-high. No more easy money, folks!

"Higher real rates may also reflect the possibility that inflation could be more volatile going forward than in the inter-crisis period of the 2010s. We may be entering a period of more frequent, and potentially more persistent, supply shocks — a difficult challenge for the economy and for central banks," Powell declared, dropping truth bombs left and right.

Remember the good ol' days after the 2008 financial crisis? The Fed slashed rates to near zero, and they stayed there for seven years. But now? Today's overnight lending rates are soaring between 4.25% and 4.5%. Buckle up, it's a whole new ballgame!

Powell Clashes with Trump's Trade Policy, Despite Pressure

Powell's supply shock warnings are echoing his earlier shots at former President Donald Trump's tariff-driven trade policy. Back on April 16, he warned that the rollercoaster of U.S. trade policy could fuel both higher inflation and slower growth.

In this crazy scenario, Powell admitted it's anyone's guess which effect the Fed will need to tackle head-on. At the time, he said the central bank would likely play the waiting game before making any big moves.

And get this: Powell made these bold statements despite Trump's relentless pressure to slash interest rates. Trump even called Powell "too late" and demanded his head on a platter. But investors? They're not buying it. They think Trump's rants won't shake up the markets just yet.