US storm
United States Reuters

US Federal Reserve chair Jerome Powell has reiterated the central bank will stick to gradual rate hikes on the expectation of continuous economic expansion.

"As long as the economy continues broadly on its current path, further gradual increases in the federal funds rate will best promote these goals," said Powell on Friday in a speech at the Economic Club of Chicago, Xinhua news agency reported.

He pointed to a positive outlook for the economy, saying that the labour market is "in the neighbourhood of maximum employment" and Fed officials have increased confidence that inflation would move up toward the 2 percent target.

A report released by the Labor Department on Friday showed that the unemployment in the US has kept at 4.1 percent in March, lower than the Fed officials' estimate of the longer-run normal rate of unemployment.

The price index for personal consumption expenditure (PCE), a preferred inflation gauge by the Fed, increased 1.8 percent in February, higher than the 1.7 percent growth in January.

In the question and answer session, Powell said that it remains difficult to estimate the impact of the Trump administration's proposed tariffs plans on inflation and economic outlook, as it was not clear whether the threatened tariffs would actually materialize and how big they will be.

However, he noted that business community has concerns over the tariffs, saying they are threatening their medium-term outlook.

The Fed has been slowly raising the interest rates since 2015. In March, the central bank raised the rates for the sixth time since December 2015 and signalled that there would be two more hikes this year.