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Jerome Powell at the Council on Foreign Relations in New York City. Photo: Spencer Platt/Getty Images

Fed Chair Jerome Powell has been put in a tough situation by President Trump and the market ahead of July's FOMC meeting, with his hand forced in the face of historic uncertainty — but he hasn't done much to help himself.

Why it matters ... The U.S. economy is at a delicate moment: trade and manufacturing data are worsening, jobs growth is volatile and slowing, and the bond market is bracing for the worst while equity investors keep expecting the best.

Driving the news: Powell again sought safety in equivocation on Tuesday, noting during a speech at the Council of Foreign Relations that "the global risk picture has changed ... since May 1, significantly," but also saying "it’s important not to overreact in the short term to things that happen to be temporary or transient."

Be smart: The Fed chair has responded by embracing what Axios' Felix Salmon calls "constructive ambiguity," pushing back against the blueprint created by predecessors Ben Bernanke and Janet Yellen. They dictated the Fed's plans to the market with forward guidance and long-winded policy statements. Powell has reversed course.

  • "Rate guidance as a tool is about the Fed being in front of markets and leading them to where [the Fed] wants to go," Vincent Reinhart, a 24-year Fed veteran who now serves as chief economist at Standish Mellon Asset Management, tells Axios.
  • "December's [FOMC meeting] showed that if you're leading, you are the target of criticism, both from the markets and the president, so they switched to much more data dependence ... and moved from the front of the pack to the back."

The bottom line: Powell is not just fighting Trump's continued criticism, as Axios' Courtenay Brown writes, but also his trade war's negative impact on the U.S. economy, while also having to hedge against a surprise agreement.

  • An "insurance rate cut" in July could not only prove a policy mistake, but further erode Powell's credibility and the Fed's.
  • But not cutting rates will put him in the crosshairs of the president and the market, which has investors pricing in a 0% chance he doesn't do it.

Go deeper: Powell's Fed statements aren't dumbing things down

Go deeper

New wave of strikes will test worker power

Illustration: Sarah Grillo/Axios

Thousands of John Deere workers hit the picket line this week after the union smacked down a new worker contract from the farm and equipment maker.

Why it matters: There’s a wave of worker angst spreading across the country. They wield new power that’s come with a historic worker shortage.

Bryan Walsh, author of Future
2 hours ago - Technology

The smart city comes of age

Illustration: Aïda Amer/Axios

Better sensors, more intelligent AI, and the coming wave of 5G wireless could finally fulfill the promise of the smart city.

Why it matters: How we organize, run and power our cities will be increasingly important in the years ahead, as urbanization expands and the damaging effects of climate change compound.

Ben Geman, author of Generate
10 hours ago - Energy & Environment

Key clean power provision likely won't survive in Dems' spending bill

A construction worker walks along a dirt road at the Avangrid Renewables La Joya wind farm in Encino, New Mexico, on Aug. 5, 2020. Photo: Cate Dingley/Bloomberg via Getty Images

A pillar of Democrats' plans to speed deployment of zero-carbon electricity is likely to be cut from major spending and tax legislation they are struggling to move on a party-line vote, per multiple reports and a Capitol Hill aide.

Driving the news: The New York Times, citing anonymous congressional aides and lobbyists, reports that West Virginia Sen. Joe Manchin (D) has told the White House he "strongly opposes" the Clean Electricity Performance Program.