With a strong job market, inflation close to the objective, and the risks to the outlook roughly balanced, the FOMC believes that for now the best way forward is to keep gradually raising the federal funds rate, Fed Chair Powell said in its semiannual Monetary Policy Report before the Committee on Banking, Housing, and Urban Affairs, US Senate.

Fed Chair also gave a positive tone for the outlook: interest rates and financial conditions remain favorable to growth; the financial system is much stronger than before the crisis; federal tax and spending policies likely will continue to support the expansion; and the outlook for economic growth abroad remains solid despite greater uncertainties in several parts of the world.

However, Fed Powell added that it is difficult to predict the ultimate outcome of current discussions over trade policy as well as the size and timing of the economic effects of the recent changes in fiscal policy.