The Federal Reserve’s new chairman has endorsed a “patient” approach to raising interest rates, declaring that gradual moves had already paid off for the US economy and there remains room for more strengthening in America’s robust jobs market.

In his first speech as the central bank chairman, Jay Powell said that subdued wage growth suggested the US labour market was not “excessively tight” and that there might be scope to pull more individuals off the sidelines into the active labour force. Participation among of those aged 25-54 was still not back to its pre-recession levels, he pointed out.

While inflation was set to pick up “notably” this spring, Mr Powell argued that the US economy was facing a number of “important longer-run challenges”.