DALLAS (Reuters) – U.S. interest-rates are “for the moment” at the correct setting for the economy, Dallas Fed President Robert Kaplan said on Thursday, but rising trade tensions and mounting inflationary pressures make it difficult to know whether the Fed’s next move will be a rate hike or a rate cut.

“I’m agnostic at this point about whether the next move is up or down,” Kaplan told reporters after a conference here. “I’m watching very carefully how these trade tensions unfold,” he said, adding that he was concerned uncertainties over U.S.-China trade could slow growth, though it was too soon to know. At the same time, he said, inflationary pressures are “intensifying” as the labor market has tightened.

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