Federal Reserve Chair Jerome Powell indicated a potential rate cut in September after months of hawkishness, highlighting a fragile balance between slowing growth, rising inflation due to tariffs, and a weakening labor market. Powell’s cautious tone sparked a surge in equity and crypto markets, with investors pricing in an 85% likelihood of a rate cut. However, Fed policymakers remain divided, with some dissenting voices emphasizing persistent inflation risks and structural labor market changes from immigration controls and trade policies. President Trump has aggressively pushed for rate cuts and criticized Fed leadership, exacerbating tensions over central bank independence.