WASHINGTON: US Federal Reserve Chair Jerome Powell flagged high uncertainty Friday surrounding President Donald Trump’s economic policies and their effects, but maintained that the central bank need not rush to adjust interest rates.
“It is the net effect of these policy changes that will matter for the economy and for the path of monetary policy,” Powell told a forum in New York.
“We do not need to be in a hurry, and are well positioned to wait for greater clarity.”
US Fed starts rate deliberations with pause expected
Powell’s comments come as Trump’s return to the White House in January brought swift changes that promise to ripple through the world’s biggest economy.
The president has taken aim at illegal immigration while imposing sweeping levies on major trading partners Canada, Mexico and China.
The tariffs sent US markets tumbling and economists have warned that if kept in place, such additional duties could weigh on longer-term economic growth and push up inflation.
But for now, Powell maintained that the US economy remains in a good position, adding it has been growing at a solid pace.
He said the Fed is focused on separating signal from noise when it comes to the impact of policies.