Federal Reserve Chair Jerome Powell said the central bank will “act as appropriate” to sustain the US expansion and it’s monitoring the implication of developments around trade negotiations on the economic outlook for the country.

Powell said they don’t know “how or when these issues will be resolved” in a speech in Chicago on Tuesday as the Federal Open Market Committee started its first public review of monetary policy, strategy, tools and communications.

“We are closely monitoring the implications of these developments for the US economic outlook and, as always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2% objective,” Powell said.

The conference was set to focus on “longer-run issues that will remain even as the issues of the moment evolve,” the Fed chair said.

Speculation that the FOMC will cut the target range on its benchmark lending rate is growing, with the probability of a 25 basis-point reduction in July standing at 49% on the CME Group’s FedWatch tool, up from just 19% a week ago and 45% a day ago.

Trade tensions between the US and partners including China and Mexico have prompted worries about growth in the world’s biggest economy, although Powell said that the economy is growing, unemployment is low and inflation is low and stable. The chair said that makes it the right time to discuss challenges around the so-called effective lower bound, or ELB, the move by policymakers in December 2008 to cut the fed funds rate to near zero during the global financial crisis.

Central banks are facing a challenging environment, and the FOMC “take seriously” the risk that misses on inflation readings could “precipitate a difficult-to-arrest downward drift in inflation expectations,” Powell said.