Traders gear up for Jerome Powell mention markets for Wednesday's Fed meeting.
Markets might be temperamental at times of uncertainty, but one thing is guaranteed: you will hear the ever-so-familiar “Good afternoon” from the man behind the podium.
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In the last few months, Fed Chair Jerome Powell has become no stranger to political pressure. With Trump’s markets jittering over tariffs, inflation, and the strength of the labor market, all eyes are once again on the Federal Reserve chief.
Although the Fed Funds futures trading currently shows over a 90% probability that the Fed will hold rates steady, traders aren’t tuning in just for the month of May. What Powell says — and how he says it — may offer critical clues about the future path of monetary policy. That’s why the mention markets are buzzing: the right keyword could hint at a summer rate cut, a shift in the balance of risks, or even the Fed’s view on Trump’s escalating trade war with China.
For some, those words are more than just signals. They can also be trading opportunities. A growing class of retail and institutional bettors are speculating on exactly what Powell will say, thanks to the emergence of “mention markets” on platforms like Kalshi.
The mention market on “What will Powell say during his May FOMC press conference?” had already attracted over $900,000 as of Wednesday morning.
One word expected to show up in Powell’s speech is starting to cast a long shadow over the market: “Tariffs.” Even higher than his iconic “good afternoon,” making it the top bet heading into the May 7 press conference. With Trump ramping up trade rhetoric and launching a new round of levies on China, traders are closely watching whether Powell will comment.
Other heavily wagered mentions include “Good afternoon” (97%), “Energy” (96%), “Expectation” (94%), “Balance of risk” (91%), and “Balance sheet” (90%). Longshot bets like “Trump” (10%), “Crypto” (15%), and even “Egg” (6%) are still drawing interest. His exact words will be pored over for subtle signals about future policy moves.
The Federal Reserve press conference will be streamed live at 2:30 p.m. ET on Wednesday, May 7, at the federal reserve website.
Why Powell could say it: President Trump's recent imposition of aggressive tariffs has introduced significant uncertainty into the economic outlook, a central concern for Fed officials and investors alike.
Market analysis: Highly likely. Given the direct impact of tariffs on economic conditions, Powell is expected to address this topic during his remarks.
Why Powell could say it: Energy prices have been volatile, influencing inflation and economic stability, key concerns for the Fed.
Market analysis: Very likely. Discussions on energy are pertinent given their impact on inflation metrics.
Why Powell could say it: Assessing the balance of risks between inflation and economic growth is central to Fed policy decisions.
Market analysis: Likely. This term encapsulates the Fed's approach to navigating economic uncertainties.
Why Powell could say it: Recent economic indicators, such as a 0.3% GDP decline in Q1, have raised recession concerns.
Market analysis: Probable. Acknowledging recession risks may be necessary given current economic data.
Why Powell could say it: Describing current monetary policy as "restrictive" helps convey the Fed's stance on curbing inflation.
Market analysis: Likely. This term is commonly used to describe tight monetary conditions.
Why Powell could say it: Credit conditions influence economic activity and are a focus for monetary policy.
Market analysis: Possible. Powell may discuss credit to address concerns about lending and financial stability.
Why Powell could say it: China's economic policies and their global impact are relevant to U.S. economic considerations.
Market analysis: Possible. Powell might mention China in the context of global economic risks.
Why Powell could say it: An inverted yield curve has long been viewed as a classic recession signal. Powell might reference it as a barometer of market expectations for future growth.
Market analysis: Gaining traction. The curve remains inverted, and with 10-year yields climbing again, Powell could nod to it as a sign of investor anxiety—especially with soft-landing hopes starting to wobble.
Why Powell could say it: Sentiment indicators, though secondary to inflation and labor data, can reflect forward-looking risk. A mention may come in the context of household spending resilience.
Market analysis: Stable or fall. Confidence dipped in recent surveys, but Powell typically downplays it unless tied to retail spending or broader economic momentum.
Why Powell could say it: Ongoing debates around stablecoin regulation or financial stability might draw crypto into the conversation, especially if asked during Q&A.
Market analysis: Still a long shot. Unless prompted, Powell is unlikely to address crypto proactively—though a volatile token event or legislation push could quickly change that.
Some traders are betting on wildcards that are long shots but not impossible. Contracts on these terms could pay off big if they are uttered.
Powell usually chooses his words carefully, but even a slight shift in tone can jolt the markets. If recession concerns deepen or geopolitical risks, especially around China, flare up, traders could quickly rotate toward risk-off bets and recalibrate their expectations in real time.
But if the Fed chair sticks to his usual script, emphasizing inflation vigilance and a steady labor market, the likeliest mentions will stay rooted in staples like “Tariff,” “Expectation,” “Projection,” and “Restrictive.”
One thing, however, is almost certain: We’ll get that now-iconic “Good afternoon” to kick off the press conference. What follows may just decide the market’s next move.
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