Federal safety net Chair Jerome Powell said Wednesday the central lender’s selection on whether to cut profit rates this month won’t account for President-elect Donald Trump’s plans to raise tariffs and constrict immigration despite expectations the moves would boost worth rise.

“Here’s what we don’t recognize,” Powell told moderator Andrew Ross Sorkin at said at the recent York Times’ DealBook Summit. “We don’t recognize how large they’ll be. We don’t recognize the timing and duration…. We can’t really commence making policy on that. We have to let this play out.”

Powell’s remarks echo his comments at a information conference following a rate cut a month ago. But since then, Trump has been more specific about his tariff plans, vowing to impose 25% levies on all imports from Canada and Mexico and 10% fees on China to prod the countries to restrain unauthorized immigration and the flow of illegal drugs, such as fentanyl, into the U.S.

Economists have said tariffs would raise prices for American consumers, at least partly reigniting worth rise. Deportations similarly would constrain the supply of workers and likely accelerate wage increases that would be passed along to consumers though higher prices.

Powell didn’t directly declare whether the Fed plans to lower its key profit rate by another quarter point this month – as most economists expect – now that worth rise broadly has arrive down. But he didn’t refute Sorkin’s assertion that another rate cut is a virtual certainty.

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Yet Powell also said that with the economy and labor trade “doing very well…we can afford to be a little more cautious as we try to” lower rates to a more normal level.

With worth rise generally easing the history couple of years, the Fed cut its key profit rate by a hefty half percentage point in September and another quarter point last month. derivatives markets still expect a quarter point reduce this month, bringing the standard short-term rate to a range of 4.25% to 4.5% – in line with officials’ December projection.

Just a half point in additional reductions are expected for all of 2025, according to derivatives markets, below the Fed’s September approximate of a percentage point in cuts.

In a talk Monday, Fed governor Chris Waller said that while the recent lack of advancement on worth rise is concerning, the Fed’s key rate is still “significantly restrictive” considering the drop-off in worth increases so far “and cutting again will only cruel that we aren’t pressing on the brake pedal quite as challenging.”

The Fed lowers rates to stimulate a softening economy and labor trade and raises them to chilly the economy and worth rise. Trimming rates this month would still “allow ample scope to later leisurely the pace of rate cuts, if needed, to maintain advancement toward our worth rise target,” Waller said.

Yet he added the Fed’s selection will depend on economic reports over the next couple of weeks, particularly on employment and worth rise. Job growth generally has slowed this year and employers added just 12,000 jobs in October, chiefly because of hurricanes in the Southeast and worker strikes.

Friday, the Labor Department is expected to update a solid 200,000 job gains, based on economists’ estimates, but much of that is likely to signal a one-period rebound from October’s impoverished showing and may not reflect the health of the labor trade.

But while the job trade has been cooling, supporting rate decreases, worth rise has been less cooperative.

After falling from a peak of 5.6% in early 2022 to 2.6% in June, the Fed’s preferred annual worth rise assess, which strips out volatile food and vigor items, was stuck at 2.7% for three months before ticking up to 2.8% in October. That’s still well above the central lender’s 2% objective.

While goods prices generally have fallen or risen modestly, the worth of services such as health worry and car repairs have continued to climb.

In 2022 and 2023, the Fed hiked its key rate from near zero to a 23-year high of 5.25% to 5.5% to fight a pandemic-related spike in prices.