by Howard Schneider and Ann Sapphir

NEW YORK (Reuters) – The Federal Reserve will not rush to lower its interest rates and awaits more clearly the consequences on the economy of the United States of the policies implemented by the administration of the new American president Donald Trump, the president of the Fed, Jarome Powell on Friday.

“The new administration is in the process of implementing major political changes in four separate sectors: trade, immigration, budgetary policy and regulations,” Jerome Powell told New York’s speech to the economic forum of the Booth School of Business of the University of Chicago.

“The uncertainty around these changes and their possible effects remain high,” he added.

“We don’t have to be in a hurry and are in good position to wait more clarity.”

This discourse by Jerome Powell takes place in a context of uncertainty where the equity markets and bond yields are down following the first announcements of Donald Trump concerning customs duties on important business partners, Mexico and Canada, as well as on imports from China.

Even if the economy “continues to be in a good situation”, according to Jerome Powell, the indicators report a possible slowdown in consumption expenditure and “high uncertainty about the economic prospects” among companies.

“It remains to be seen how these developments could affect future expenses and investments,” he said.

However, the main indicators remain solid, according to the president of the Fed, with progress on inflation and employment.

The monthly report of the Labor Department published on Friday identified 151,000 non -agricultural jobs created last month after 125,000 in January (revised figure of 143,000).

Jerome Powell stressed that the economy has created a “solid” number of 191,000 jobs per month since September.

For the president of the Fed, “most of the long -term measures remain stable and consistent with our objective of 2% inflation” while “our current policy is well placed” to respond to inflation which would slow down faster than expected or an economy that would start to weaken.

The Fed should maintain its rate target in the current range of 4.25% to 4.5% after its next monetary policy meeting scheduled for March 18 and 19.

Its managers will also publish new economic projections which will give clues to the possible consequences of the return of Donald Trump to the White House on inflation, employment, growth and development of interest rates.

Investors have started to consider more seriously the possibility of an economic slowdown and now expect the Fed to approve three reduction in a quarter of a percentage point by the end of the year.

( Zhifan Liu)

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