President Donald Trump, speaking from the White House on Friday through Truth Social, told Federal Reserve Chair Jerome Powell to stop playing around and cut interest rates immediately.

Trump said this is the perfect moment to act, pointing out that prices are down, inflation is cooling, and employment numbers are rising. He accused Powell of being “always late” and told him bluntly to “cut interest rates” and “stop playing politics.” He claimed even egg prices had dropped by 69%, calling it a “BIG WIN for America.”

But Jerome’s not listening. Speaking that same day in Arlington, Virginia, Powell told a room of business reporters that the Fed won’t touch rates until it has a clearer read on what Trump’s new tariffs are going to do to the economy.

That’s after Trump slapped a 10% tariff across all imports on Wednesday and triggered immediate retaliation from China, which fired back with a 34% levy on everything coming in from the U.S.

Powell says Fed won’t move until the impact becomes clearer

The Fed Chair admitted this could cause real problems. He said the situation now has “highly uncertain” consequences and warned that the new trade restrictions are bigger than anyone expected.

Jerome explained that these tariffs are “significantly larger than expected,” and warned that the effects won’t be small. “The same is likely to be true of the economic effects, which will include higher inflation and slower growth,” he said.

Powell also said the Fed’s main job is to keep inflation under control and expectations steady. “Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem,” he said in prepared remarks.

Even though the economy still looks stable at the moment, Powell said the tariff war could flip that quickly. He said it depends on how long these tariffs last and how they end up hitting consumer prices.

“While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent,” he explained.

The Fed chair said what happens next depends on how deeply the price hikes go and how fast they pass through to the consumer level. The Fed’s job now, he said, is to make sure those effects don’t become permanent.

The Fed’s mandate is to keep inflation low and maintain full employment. Right now, core inflation is sitting at 2.8%, which is still above the Fed’s official 2% target. Powell pointed out that while tariffs are usually viewed as a temporary boost in prices, Trump’s shenanigans are forcing the Fed to think differently.

Markets drop again as crypto stays up and China fires back

Meanwhile, Wall Street is seeing another brutal day of selling. U.S. stocks took another dive Friday, dragging deeper after the bloodbath that started earlier in the week. Investors panicked over China’s response to Trump’s move, which came just hours before Powell spoke.

But crypto was surprisingly calm. Bitcoin stayed positive, gaining 1.7% and reaching $83,396.89, based on CoinGecko data. Most other major coins were up too. The crypto market managed to hold steady even as traditional markets crashed again.

Crypto-linked stocks didn’t do so well. Coinbase fell roughly 8%, while MicroStrategy dropped over 1%. Gold took a hard hit too. Spot gold was down 2.6%, falling to $3,038.50 an ounce. U.S. gold futures sank 2.9%, landing at $3,020.79.

Traders are already betting that Powell’s going to give in. Market data showed expectations growing that the Fed will cut rates by a full percentage point before the end of the year, with some traders predicting the first cut could come in June. But Powell gave no sign of leaning that way.

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