NEW YORK (Reuters) -U.S. Federal Reserve Chair Jerome Powell said on Tuesday the central bank is in a “challenging situation” with an ongoing risk of faster-than-expected inflation at the same time that weak job growth has raised concern about the health of the labor market.

In prepared comments to Rhode Island’s Greater Providence Chamber of Commerce, Powell offered little indication of when he thinks the Fed might next cut interest rates, noting that there was danger to both cutting too fast and risking a new surge of inflation, or reducing rates too slowly and possibly causing unemployment to rise unnecessarily.

MARKET REACTION

STOCKS: The S&P 500 held declines and was last down 18.42 points, or 0.27%, to 6,675.44.

BONDS: Treasury yields moved lower, with the yield on the benchmark

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