Federal Reserve Chair Jerome Powell's recent warnings about the economic uncertainty stemming from tariffs have led to a stagnation in U.S. stock markets, with the S&P 500 closing just below the 6,000-point mark. Powell indicated that the impact of tariff increases on inflation could be more persistent than previously anticipated, complicating the Fed's monetary policy decisions. This uncertainty has caused investors to reassess their positions, leading to a lack of significant movement in stock prices and a decline in bond yields.

The Fed has maintained interest rates without change for the fourth consecutive time, while also adjusting its economic growth forecasts downward. Powell's comments suggest that the Fed is in a wait-and-see mode, closely monitoring the effects of tariffs on inflation and employment. The potential for further tariff-driven price hikes could lead to more sustained inflation, which may influence future Fed policy decisions.