US Fed chair flags policy uncertainty, in no rush to adjust rates

TDT | Manama

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US Federal Reserve Chair Jerome Powell flagged high uncertainty Friday surrounding President Donald Trump’s economic policies and their effects, maintaining 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 we are well positioned to wait for greater clarity.”

Wall Street’s main indices picked up shortly after Powell’s comments.

Powell’s remarks come as Trump’s return to the White House in January brings 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, triggering retaliation.

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 that it has been growing at a solid pace while the labor market remained robust.

Government data released Friday showed that the US economy added 151,000 jobs in February, a healthy rate though lower than anticipated. Unemployment crept up slightly. With ongoing shifts in trade policy, Powell stressed that the Fed is focused on separating signal from noise as the outlook evolves.