Stocks fell, with the Dow Jones Industrial Average dipping 1.6%, after Federal Reserve Chair Jerome Powell gave a bleak outlook on the economy at a press conference announcing interest rates would remain steady.
“We had the tariff shock, we had the pandemic, and now we have an energy shock of some size and duration” amid war in Iran, Powell said at a news conference. “You worry that’s the kind of thing that can cause trouble for inflation expectations.”
That uncertainty makes it even harder for the Fed to weigh a softening labor market against persistent inflation.
On Wednesday the Labor Department released data showing prices businesses pay for goods are rising.
Powell mentioned weak job numbers, too. “Effectively, there’s zero net job creation in the private sector.”
Still, Fed policymakers left open the possibility of a rate cut later in the year.