# US economy facing potential slowdown amid ‘heightened uncertainty’, says Fed chair

Federal Reserve head Jerome Powell said it was in no rush to cut interest rate as government overhauls key policies

The US economy faces a potential slowdown in consumer spending amid “heightened uncertainty about the economic outlook” among businesses, the  chair, Jerome Powell, said on Friday.

The central bank chief said the Fed will be in no rush to cut interest rates while it waits for more clarity on how the policies of the new  affect the economy.

“The new administration is in the process of implementing significant policy changes in four distinct areas: trade, immigration, fiscal policy and regulation,” Powell said in remarks prepared for delivery at a University of Chicago Booth School of Business economic forum in New York City. “Uncertainty around the changes and their likely effects remains high.

“We are focused on separating the signal from the noise as the outlook evolves. We do not need to be in a hurry and are well positioned to wait for greater clarity.”

Powell spoke at a volatile time, with stock markets and bond yields both declining in the wake of Donald Trump’s  of steep import tariffs on major trading partners Mexico and Canada, followed by delays in implementing them. Trump has also doubled tariffs on imports from China.

Though Powell said the economy “continues to be in a good place”, he added: “It remains to be seen how these developments might affect future spending and investment.”

Still, key indicators remain solid, Powell added, with ongoing, if uneven, progress on inflation and continued job gains.

With the US government on Friday reporting job growth of , Powell noted the economy has been adding a “solid” 191,000 jobs a month since September.

Some measures of short-term inflation expectations have moved higher, Powell said, but “most measures of longer-term expectations remain stable and consistent with our 2% inflation goal”.

Whether inflation slows faster than expected or the economy does start to weaken, “our current policy stance is well positioned” to respond, he said.

The Fed is expected to hold its benchmark interest rate steady in the current 4.25%-4.50% range at its 18 and 19 March policy meeting. Policymakers will also issue new economic projections that will give insight into how the first two months of the Trump administration have influenced the outlook for inflation, employment, growth and the path of interest rates.

Investors have begun taking the possibility of an economic slowdown more seriously, and now expect the Fed to approve three quarter-percentage-point rate cuts by the end of this year.

_Reuters contributed_ reporting

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