Powell just drew a hard line on what the Fed can and cannot fix
His point was simple: Fed tools do not have any meaningful impact on supply shocks.
That matters because it separates two very different problems.
The Fed can respond to demand, liquidity, and financial conditions, but it cannot directly fix disruptions in supply, production, or external shocks hitting the economy.
So when inflation or pressure is being driven by the supply side, monetary policy starts looking much less powerful than people want it to be.
This is the part markets need to remember:
not every economic problem can be solved with rates.