US Federal Reserve Chairman Jerome Powell on Friday indicated the central bank is likely to hold interest rates because of uncertainty surrounding President Donald Trump's policies.
“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,” Mr Powell said in remarks at the University of Chicago Booth School of Business 2025 US Monetary Policy Forum in New York.
Mr Powell noted four areas – trade, immigration, fiscal policy and regulation – that Mr Trump's administration is changing.
“It is the net effect of these policy changes that will matter for the economy and for the path of monetary policy,” he said.
Most economists argue that Mr Trump's plans to place 25 per cent tariffs on Mexico and Canada – America's two biggest trading partners – will lead to slower growth and higher inflation. And Mr Trump's on-again, off-again approach towards their implementation has brought uncertainty over the economic outlook, pummelling US markets in a week of volatile trading.
Despite this uncertainty, Mr Powell said the economy is “in a good place”. His remarks came shortly after new data showed the US added a soft – but still solid – 151,000 jobs in February, while the unemployment rate slightly rose to 4.1 per cent.
Meanwhile, the Fed's separate data showed its preferred inflation measure slowed last month to 2.5 per cent year-on-year, still half a per cent above its long-term target.
“The path to sustainably returning inflation to our target has been bumpy, and we expect that to continue,” he said.
The Fed chairman's speech was one of the final public remarks by the central bank before it begins its so-called blackout period – the window in which officials are prohibited from giving public remarks on monetary policy before a meeting.
The central bank holds its next meeting on March 18-19, where it is expected to keep the Fed funds target range steady between 4.25 and 4.50 per cent.
Warning signs are beginning to appear on the economic outlook, with US consumers unexpectedly pulling back their spending in January. And while some recent surveys showed consumer confidence and sentiment is declining, Mr Powell dismissed these as poor predictors of consumption growth.
However, the Fed's own beige book of economic conditions released on March 5 showed businesses across the country were concerned over the impact of tariffs.
Mr Powell also said the Fed is monitoring inflation expectations, noting some near-term expectations have moved up.
“However, most measures of longer term expectations remain stable and consistent with our 2 per cent goal,” he said.
Fed officials are assessing whether the inflation effects of Mr Trump's tariffs would be a one-time bump or more sustained.
Speaking on Thursday, Fed governor Christopher Waller maintained his view that the effect of the tariffs will not be significant. Mr Waller added that he believes the Fed could cut rates two or three times this year if the economy performs as he expects.
New York Fed President John C Williams said tariffs will have some effect on prices this year although it was still too early to assess how they would be affected.
TWISTERS
Director: Lee Isaac Chung
Starring: Glen Powell, Daisy Edgar-Jones, Anthony Ramos
Starring: Nader Abd Alhay, Majd Eid, Ramzi Maqdisi
Directors: Tarzan and Arab Nasser
Rating: 4.5/5
Countries offering golden visas
UK Innovator Founder Visa is aimed at those who can demonstrate relevant experience in business and sufficient investment funds to set up and scale up a new business in the UK. It offers permanent residence after three years.
Germany Investing or establishing a business in Germany offers you a residence permit, which eventually leads to citizenship. The investment must meet an economic need and you have to have lived in Germany for five years to become a citizen.
Italy The scheme is designed for foreign investors committed to making a significant contribution to the economy. Requires a minimum investment of €250,000 which can rise to €2 million.
Switzerland Residence Programme offers residence to applicants and their families through economic contributions. The applicant must agree to pay an annual lump sum in tax.
Canada Start-Up Visa Programme allows foreign entrepreneurs the opportunity to create a business in Canada and apply for permanent residence.
Listen to Extra Time
The Melbourne Mercer Global Pension Index
The Melbourne Mercer Global Pension Index
Mazen Abukhater, principal and actuary at global consultancy Mercer, Middle East, says the company’s Melbourne Mercer Global Pension Index - which benchmarks 34 pension schemes across the globe to assess their adequacy, sustainability and integrity - included Saudi Arabia for the first time this year to offer a glimpse into the region.
The index highlighted fundamental issues for all 34 countries, such as a rapid ageing population and a low growth / low interest environment putting pressure on expected returns. It also highlighted the increasing popularity around the world of defined contribution schemes.
“Average life expectancy has been increasing by about three years every 10 years. Someone born in 1947 is expected to live until 85 whereas someone born in 2007 is expected to live to 103,” Mr Abukhater told the Mena Pensions Conference.
“Are our systems equipped to handle these kind of life expectancies in the future? If so many people retire at 60, they are going to be in retirement for 43 years – so we need to adapt our retirement age to our changing life expectancy.”
Saudi Arabia came in the middle of Mercer’s ranking with a score of 58.9. The report said the country's index could be raised by improving the minimum level of support for the poorest aged individuals and increasing the labour force participation rate at older ages as life expectancies rise.
Mr Abukhater said the challenges of an ageing population, increased life expectancy and some individuals relying solely on their government for financial support in their retirement years will put the system under strain.
“To relieve that pressure, governments need to consider whether it is time to switch to a defined contribution scheme so that individuals can supplement their own future with the help of government support,” he said.
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11 What time: Each day’s play is scheduled to start at 2pm UAE time. TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
