A permanent failure, often a policy rejection: blacklisted IP (Spamhaus, Barracuda), content flagged as spam, or no valid recipients. Also the greeting of a server that refuses you outright.
554
Class
5xx · Permanent failure
Retried?
No, the message bounces
Defined in
RFC 5321
What to do
Read the text: it usually names the blacklist or rule.
Check your IP on blacklists and request delisting.
Check SPF, DKIM, DMARC and PTR of your server.
How it appears in a bounce
554 Transaction failed
Paste the full bounce into the decoder — it finds every code and recipient and says what to check.