Powell says Fed expects to stick with gradual rate hikes

CHICAGO — Federal Reserve Chairman Jerome Powell on Friday painted a mostly sunny view of the U.S. economy and said the Fed remains committed to raising its key interest rate gradually unless events change. He said it was too soon to determine how a trade fight with China could affect the U.S. economy.

In his first speech as Fed leader, Powell noted that the central bank raised its key rate by a quarter-point at its March meeting, just the sixth increase since late 2015. He depicted that rate hike as “another step in the ongoing process of gradually scaling back” the ultra-low rates it employed to lift the economy out of the Great Recession.

This “patient approach has paid dividends and contributed to the strong economy we have today,” Powell said in remarks to the Economic Club of Chicago.

He said the Fed will continue to balance the risks of moving too slowly in raising rates and running the risk that inflation gets out of control and moving too quickly, which could hurt growth.

Asked during a question and answer session about the economic impact of higher trade tariffs, Powell said the issue was discussed at the Fed’s meeting last month. Fed officials noted that business executives around the country were expressing concerns.

“People really don’t see yet any implications in the near term for the outlook because we don’t know the extent to which the tariffs will actually go into effect,” Powell said. “Tariffs can push up on prices, but again, it is too early, I think, to really say whether that is going to be something that happens or not.” Powell