Powell to Speak Tonight: Middle East Situation Adding to Inflation Pressure, Rate Cut Expectations Face Another Test

Federal Reserve Chair Jerome Powell will take part in a public event and live Q&A session tonight at 22:30 Beijing time (March 30). Amid ongoing Middle East tensions and heightened market volatility, this appearance ranks among the week’s most anticipated macroeconomic events. Markets widely expect Powell to maintain a cautious stance, avoiding clear signals on the rate-cut path. With inflation still above the Fed’s 2% target and added uncertainty from tariffs and geopolitical conflicts, the probability of the Fed holding rates steady in the near term is rising—reinforcing the “no rate cut” narrative. Tensions persist between former President Donald Trump and the Federal Reserve. If Powell delivers a hawkish or wait-and-see signal, markets anticipate Trump will again exert pressure, escalating the policy standoff. On the fundamental front, signs of weakness have emerged in the U.S. labor market: February saw a sharp drop in job additions, pressuring the economic outlook and placing the Fed in a “high inflation + slowing growth” dilemma. Analysts note that until Middle East developments clarify, monetary policy will likely remain in wait-and-see mode, with market trends continuing to hinge heavily on geopolitical shifts and changes in the inflation trajectory.