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Federal Reserve Chair Jerome Powell did not want to spend much time Wednesday talking about a new US president who is already posing challenges to the central bank by asking that interest rates come down "a lot."
"I’m not going to have any response or comment whatsoever on what the president said," Powell told reporters Wednesday after the Fed held interest rates steady following three straight cuts. "It is not appropriate for me to do so."
Read more: Fed rate decision: How it affects your bank accounts, loans, credit cards, and investments
But it was clear from his comments that several unknowns about the economic policies of the new Trump administration could have a future effect on Fed monetary policy, forcing the central bank to remain cautious about any further actions for now.
"We don’t need to be in a hurry to adjust our policy stance," he said.
Powell cited tariffs, immigration, fiscal policy, and regulatory policy as broad areas that are still not defined as Trump 2.0 gets underway.
"We need to let those policies be articulated before we can make a plausible assessment," he said. “We are going to be watching carefully."
The range of possibilities with Trump’s tariff plans, he added, are "very, very wide," and it’s not yet known how they could filter through to US consumers.
Trump is threatening to impose tariffs on Mexico, Canada, and China as early as this Saturday, a stance that some economists predict will put upward pressure on inflation just as the central bank is trying to ensure that issue is finally under control.
Trump hinted at a coming clash with Fed policymakers as he spoke virtually before the World Economic Forum last week, saying he would "demand" lower rates.
Trump doubled down on his comments later while talking to reporters, noting that he wants rates to come down "a lot" and that he thinks the Fed will listen to him. He said he expects to talk directly with Powell "at the right time." Powell said Wednesday he had not spoken with the new president.
Trump posted a new message to his social media platform Wednesday afternoon arguing Powell and the central bank "failed to stop the problem they created" on inflation.
Some Fed officials have aired concerns behind closed doors that the trade and immigration policies of the new Trump administration might provide more upward price pressure.
And Wednesday’s decision by the Fed to pause came with a statement that appeared to show policymakers remain cautious about the direction of inflation.