Jerome Powell struck a surprisingly upbeat tone on Wednesday, calling the U.S. economy \u201camazing to see\u201d after years of shocks.<\/p>\n
But as he spoke during his penultimate press conference, the Federal Reserve chair repeatedly returned to a more unsettling theme: no one\u2014not even the Fed\u2014knows what comes next.<\/p>\n
He took advantage of reporters\u2019 questions to take a wide view on the economy over the last six years, calling the economy\u2019s resilience through years of overlapping crises \u201camazing to see\u201d\u2014even as he noted the Fed is still navigating one of its trickiest moments in decades.<\/p>\n
Powell spent much of the press conference cataloging the problems the Fed can\u2019t solve and the questions it can\u2019t answer. Fortune calculated that he said the phrase \u201cdon\u2019t know\u201d 17 times during the conference.<\/p>\n
\u201cThe US economy has really been just doing pretty well through a lot of significant challenges over the past few years,\u201d Powell said following the Fed\u2019s decision<\/a> to hold interest rates steady for the second straight meeting. \u201cIt\u2019s been amazing to see.\u201d<\/p>\n The remark came in response to a question about whether the economy could hold up despite a possible energy shock from the war in Iran. Powell pointed to 2023, when the Fed was aggressively raising rates and \u201cclose to 100% of economists called for a recession.\u201d It never came. \u201cIn fact, 2023 was a really strong year,\u201d he said.<\/p>\n During his time as chair, Powell has faced a global pandemic that rippled through supply chains for years, a startling war in Ukraine that caused an energy shock, a battery of tariffs, and now this war in Iran, which the IEA has warned threatens to cause the worst energy crisis in history. Still, to Powell\u2019s point, the economy throughout his tenure never truly dipped into a recession, stagflation, or depression, as many had forecast at some point or another during the conflicts.<\/p>\n Throughout the crises, Powell insulated himself\u2014and infuriated many others\u2014by never quite committing to a base case of how it would play out. He famously held out on declaring whether inflation from tariffs would be a \u201cone-time\u201d pass-through or something more sticky. During the aggressive rate-hike cycle, he refused to signal when the Fed would let up, earning him the nickname <\/a>\u201cToo Late Powell\u201d from President Donald Trump.<\/p>\n Inflation is still running<\/a> a full percentage point above the Fed\u2019s 2% target, with core PCE at 3%. Powell attributed between half and three-quarters of a percentage point of that overshoot to tariffs, which he said are taking longer to work their way through the economy than the Fed initially expected. On the morning of the decision, wholesale prices came in hotter than expected, compounding market fears that inflation might be worse than anticipated.<\/p>\n The labor market, meanwhile, has stalled. Adjusted for earlier overcounts, private-sector hiring has effectively flatlined. Once you adjust for overcounting in previous months, private-sector job creation has effectively flatlined. The February jobs report <\/a>showed employers cutting 92,000 positions, and the unemployment rate ticked up to 4.4%. Powell said the break-even rate for new jobs is essentially zero, given that labor force growth has all but stopped due to immigration restrictions during the Trump administration.<\/p>\n \u201cThat\u2019s balance,\u201d Powell said, \u201cbut it does have a feel of downside risk, and it\u2019s not kind of a really comfortable balance.\u201d<\/p>\n Then there\u2019s that war. Oil prices have surged since the Iran conflict began, with Brent crude nearing $115 a barre<\/a>l and gas prices jumping almost $1 per gallon\u2014raising fresh fears of another inflation spike. Powell acknowledged the oil shock would create \u201cupward pressure on inflation\u201d and \u201cdownward pressure on spending and employment\u201d\u2014but said the Fed has no way of knowing how large or lasting those effects will be.<\/p>\n \u201cNobody knows,\u201d he said. \u201cThey could be much smaller or much bigger. We just don\u2019t know.\u201d<\/p>\n Powell rejected the idea that the U.S. is in stagflation\u2014at least for now\u2014and insisted the economy is holding together.<\/p>\n But his broader message was harder to ignore: the Fed is running out of easy options, the risks are rising, and even the world\u2019s most powerful central bank is navigating without a clear map.<\/p>\n