03:18 PM EDT, 03/21/2025 (MT Newswires) -- The US economy is facing high uncertainty amid evolving fiscal and trade policies, though the current monetary policy stance places the Federal Reserve well to adjust to changing conditions, New York Fed President John Williams said Friday.

On Wednesday, the central bank's Federal Open Market Committee decided to leave its benchmark lending rate unchanged at 4.25% to 4.50% for a second straight meeting. Policymakers kept their interest rate outlook intact through 2027 while downgrading economic growth projections.

"Uncertainty is high, and there are many scenarios that could play out, depending on fiscal and trade policies and geopolitical and other developments," Williams said Friday in remarks prepared for a speech at a conference in Bahamas. "Recent data -- both hard and soft -- are sending mixed signals."

The Trump administration has recently proposed or implemented tariff on its key trading partners, including China, Canada and the European Union, which have all announced retaliatory tariffs.

President Donald Trump said Friday there will be "flexibility" to his plans for reciprocal tariffs, which are scheduled to go into effect April 2, CNBC reported. Trump, however, apparently opposed the idea of making exceptions, according to the report.

"The current modestly restrictive stance of monetary policy is entirely appropriate given the solid labor market and inflation still running somewhat above our 2% goal," Williams said. "It also positions us well to adjust to changing circumstances that affect the achievement of our dual mandate goals."

US gross domestic product growth this year is expected to "step down" from last year's rate partly because of a slowdown in labor force expansion amid lower immigration rates, Williams said. The disinflationary process has "continued on a bumpy path" toward the FOMC's 2% long-term inflation target, he added.

In the committee's Summary of Economic Projections released Wednesday, the central tendency of projections for GDP growth this year was between about 1.5% and 2%, and for inflation, between 2.5% and 3%, Williams said Friday. "Any of these outcomes -- or even some others outside these ranges -- seem completely plausible to me."

As the New York Fed's head, Williams serves as a permanent voting member of the FOMC.

Markets are currently pricing in an 84% probability that policymakers will again hold interest rates steady in May, according to the CME FedWatch tool. The remaining odds are in the favor of a 25-basis-point reduction.