WASHINGTON (AP) — The Federal Reserve can stay patient and wait to see how tariffs and other economic policies of the Trump administration play out before making any changes to interest rates, Chair Jerome Powell said Wednesday.

“As that great Chicagoan Ferris Bueller once noted, ‘Life moves pretty fast,'” Powell said in a speech to the Economic Club of Chicago. “For the time being, we are well positioned to wait for greater clarity” on the impact of policy changes in areas such as immigration, taxation, regulation, and tariffs, Powell said.

The sharp volatility in financial markets since President Donald Trump announced sweeping tariffs April 2, only to put most of them on hold a week later, has led to speculation about whether the Fed would soon cut its key interest rate or take other steps to calm investors. Yet the Fed is unlikely to intervene unless there is a breakdown in the market for Treasury securities or other malfunctions, economists say.

Stocks fell further after Powell’s remarks. The broad S&P 500 index dropped more than 2% in afternoon trading.

In his prepared remarks, Powell reiterated that the Trump administration’s tariffs are “significantly larger than anticipated.”

“The same is likely to be true of the economic effects, which will include higher inflation and slower growth,” he said.

Powell also said that the Fed could face threats to both of the mandates it’s been given by Congress: To achieve maximum employment and maintain stable prices. Should both inflation and unemployment rise, that would be a “challenging scenario,” he said, because the Fed would essentially have to choose whether to keep interest rates high to fight inflation, or cut them to spur growth and hiring.

“Our tool only does one of those two things at the same time,” he said in a question-and-answer session.