The U.S. economy remains strong despite increased uncertainty, Federal Reserve (Fed) Chairman Jerome Powell said at an event at the University of Chicago Booth School of Business.
He reiterated that the Fed does not need to rush to cut the benchmark interest rate further.
“Despite rising uncertainty, the U.S. economy is still in good shape,” Powell said. – We don’t need to rush; we are quite prepared to wait for greater clarity.”
Federal Reserve Bank of Atlanta President Raphael Bostic said Friday that the Fed probably won’t have enough clarity on U.S. economic conditions until “late spring or summer” to continue adjusting monetary policy.
Bostic said it is difficult to predict at this point where the U.S. economy might move given the change in U.S. policy and will wait to see the effects of trade duties, weakening consumer confidence and lower immigration flows begin to be reflected in economic data.
Powell said in his speech that it is “the implications of these changes that will matter for the U.S. economy and monetary policy.”
He added that surveys of homeowners and businesses indicate growing concern about the outlook for the economy.
“We will just have to wait to see how all of this affects future spending and investment,” he said.
Powell also said progress in slowing inflation is likely to continue but will be uneven.
The Fed kept the benchmark rate in a range of 4.25-4.5 percent per annum at the end of its January meeting. The rate was cut by 1 percentage point last year.
The next meeting of the Fed will be held on March 18-19.
