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Federal Reserve Chairman Jay Powell was concerned about US growth after Donald Trump’s administration, number of disappointing jobs and U-turns in a turbulent week in the financial markets.
Powell on Friday said the world’s biggest economy remained “good” despite growing “uncertainty” after the president launched an aggressive agenda for tariffs and spending cuts.
“We’re focused on separating signals from noise as our outlook evolves,” Powell said.
Powell’s comments come as the Blue Tip S&P 500 finished the week 3.1% with its worst run since early September. US stocks have returned sharply in recent weeks after pessimistic economic reports urged concerns that Trump’s tariffs would slow growth.
Business executives have warned of a chaotic pivot in trade policy, including a massive reversal of tariff plans for goods from Canada and Mexico this week, making it difficult to run businesses and could hamper fresh investments in the US.
Charles Lemonides, chief investment officer at ValueWorks, a New York-based hedge fund, said the United States is “at an economic crossroads.” “We don’t know where the policy is heading. That creates a huge disruption.”
On Friday, the Bureau of Labor Statistics released data showing that the US created 151,000 jobs in February, not reaching 160,000 forecasts by economists voted by Reuters.
The unemployment rate was 4.1% last month, but is stable at 4% compared to expectations.
“The emotion of investors was post-election euphoria, but over the past month there has been a lot of that happiness,” said Jim Tierney of Alliancebernstein’s Intensive US Growth Fund.
“Powell says everything is going well, but that’s not what consumer sentiment is saying, nor is it a place where you hear business sentiment,” he added.
The Fed chair recently showed that it would maintain key interest rates in the current range of 4.25% to 4.5% as the central bank assessed the impact of Trump’s policies.
But the market is increasingly betting on the rise. This year, they will be forced to drag Treasury yields and cut fees more aggressively than they would weigh in dollars.
The US Dollar Index, which tracks greenback strength against six other currencies, lost 4.3% this year.
Powell asked Friday what urged the Fed to deal with tariffs imposed on U.S. imports.
Some economists have warned that Trump’s spending cuts and federal workforce cuts could also be dragged into the economy through the so-called “government efficiency” led by billionaire Elon Musk.
Earlier in the week, Trump rewind some of the tariffs he imposed on Canada and Mexico to soften the market. On Friday, he acknowledged that his policies and sometimes chaotic developments could lead to some economic pain.
“There may be some obstruction, a bit of disruption,” the president repeated his speech on Tuesday night, reiterating the line to Congress. “There’s always changes and adjustments.”
