NEW YORK
The US Federal Reserve is in no hurry to adjust its policy stance as the Trump administration’s trade, immigration, fiscal and regulation policies take shape,” Fed Chair Jerome Powell said Friday.
He said that while there have been significant changes in those four policies, especially in trade, uncertainty around those areas stays very high.
“As we parse the incoming information, we are focused on separating the signal from the noise as the outlook evolves,” he noted in an event hosted by the University of Chicago Booth School of Business.
“Despite elevated levels of uncertainty, the US economy continues to be in a good place,” he said. “We do not need to be in a hurry, and are well-positioned to wait for greater clarity.”
Powell stressed that surveys of households and businesses indicate increased uncertainty about the economic outlook, while recent data imply consumer spending may moderate
“It remains to be seen how these developments might affect future spending and investment,” he said.
He also noted that he anticipated continued, albeit uneven, progress in reducing inflation.
“The path to sustainably returning inflation to our target has been bumpy, and we expect that to continue.
“We see ongoing progress in categories that remain elevated, such as housing services and the market-based components of non-housing services,” he added.
He said if inflation does not continue to move toward the Fed’s 2% goal, the central bank can maintain policy restraint for longer
And if the labor market starts to weaken and inflation were to fall more rapidly than anticipated, they can ease monetary policy.
