Federal Reserve Chair Jerome Powell said Wednesday the central bank’s decision on whether to cut interest rates this month won’t account for President-elect Donald Trump’s plans to raise tariffs and constrict immigration despite expectations the moves would increase inflation.

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

Powell’s remarks echo his comments at a news 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 inflation. 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 say whether the Fed plans to lower its key interest rate by another quarter point this month – as most economists expect – now that inflation broadly has come 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 market "doing very well...we can afford to be a little more cautious as we try to" lower rates to a more normal level.

With inflation generally easing the past couple of years, the Fed cut its key interest rate by a hefty half percentage point in September and another quarter point last month. Futures markets still expect a quarter point decrease this month, bringing the benchmark short-term rate to a range of 4.25% to 4.5% – in line with officials’ December forecast.

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

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

The Fed lowers rates to stimulate a softening economy and labor market and raises them to cool the economy and inflation. Trimming rates this month would still “allow ample scope to later slow the pace of rate cuts, if needed, to maintain progress toward our inflation target,” Waller said.

Yet he added the Fed’s decision will depend on economic reports over the next couple of weeks, particularly on employment and inflation. 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 report a solid 200,000 job gains, based on economists’ estimates, but much of that is likely to signal a one-time rebound from October’s poor showing and may not reflect the health of the labor market.

But while the job market has been cooling, supporting rate decreases, inflation 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 inflation measure, which strips out volatile food and energy items, was stuck at 2.7% for three months before ticking up to 2.8% in October. That’s still well above the central bank’s 2% goal.

While goods prices generally have fallen or risen modestly, the price of services such as health care 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.