US Federal Reserve Chairman Jerome Powell (Photo: AP)
NEW YORK, June 25 (Xinhua) -- US Federal Reserve Chairman Jerome Powell said Tuesday that the central bank is weighing possible interest rate cuts amid current economic uncertainties, stressing the central bank's independence on policymaking.
"The question my colleagues and I are grappling with is whether these uncertainties will continue to weigh on the outlook and thus call for additional policy accommodation," Powell said at the Council on Foreign Relations in New York.
He said that the case for somewhat more accommodative policy has strengthened given that economic crosscurrents have re-emerged, with apparent progress on trade turning to greater uncertainty and with incoming data raising renewed concerns about the strength of the global economy.
"But we are also mindful that monetary policy should not overreact to any individual data point or short-term swing in sentiment," he said.
Powell said the baseline outlook of the Fed's monetary policymakers "remains favorable" with unemployment remaining near historic lows and inflation expected to return the Fed's 2 percent objective over time but at a slower-than-anticipated pace.
However, "the risks to this favorable baseline outlook appear to have grown," noted the Fed chief.
"We will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansions," he said, echoing the main stance from last week's Federal Open Markets Committee (FOMC) meeting.
Last week, the Fed's policymaking panel FOMC left the interest rates unchanged while opening the door for lowering interest rates in the future as officials weighed mixed signals on the health of the US economy and the impact of trade tensions.
The Fed chair also emphasized that politics should be ruled out during central bank's policymaking.
"The Fed is insulated from short-term political pressures - what is often referred to as our 'independence,'" he said, adding that damage often arises when policy bends to short-term political interests.
The comments came a day after US President Donald Trump said the central bank was acting like a "stubborn child" for refusing to pursue easy money policies.
On Monday, Trump tweeted that the Fed "doesn't know what it is doing." Powell has repeatedly underscored the independence of the central bank from political sway in guiding monetary policy.
Other Fed officials include Atlanta Fed President Raphael Bostic and St. Louis Fed President James Bullard also made public remarks Tuesday as investors were watching closely for clues about the direction of monetary policy.
Market expectations for a July rate cut are at 100 percent, according to the CME Group's FedWatch tool late Tuesday.