Fed Chair Jerome Powell echoed other Fed officials’ comments and said yesterday that policymakers can be patient on next rate move. And Fed will be “waiting and watching” in the coming months.

Powell said at the Economic Club of Washington that “Especially with inflation low and under control, we have the ability to be patient and watch patiently and carefully as we … figure out which of these two narratives is going to be the story of 2019”. He referred to the risks of overheating and slowdown. Though, he maintained that Fed will continue to shrink the balance sheet to a “substantially smaller” level.

Powell also emphasized that the federal funds rate projections are not plan. He said “there is no such plan” and “that was conditional on a very strong outlook for 2019”. He added “there is no pre-set path for rates” and “we can flexibly and quickly move policy, and we can do so significantly if that’s appropriate.”

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