Powell says he would reject any Trump request to resign

US stocks rally after strong jobs data, dovish Fed comments

US stocks rally after strong jobs data, dovish Fed comments

Powell also discounted recent weakness in the economy, referencing the Institute of Supply Management's reading of manufacturing, which came in at its weakest level in about two years, sparking worries of a economic slowdown taking root in the U.S. Powell said that ISM report was already off a historically high level and remains strong.

By Rich MillerFederal Reserve Chairman Jerome Powell has managed to assuage fickle financial markets by muddying the central bank's monetary message.

"We wouldn't hesitate to change it and that would include the balance sheet". The Dow rose 3.3 per cent to 23,433.16 after gaining 832 during the afternoon.

Following Powell's remarks, Treasury yields rose and futures traders began pricing in a small chance of a rate hike this year, versus no chance seen before Powell began speaking. Most of the companies in those industries stand to do better in times of faster economic growth.

Nonfarm payroll jobs climbed by 312,000 in December, and unemployment climbed 0.2 percent to 3.9 percent, which is still lower than the 4.1 percent unemployment rate the Bureau reported last December.

Powell denied the criticism that the Fed's gradual reduction of its holdings of Treasuries, mortgage bonds and other assets - amounting to 4.5 trillion dollars when the Fed began its balance sheet normalization program in October 2017 - had exacerbated the stock market turbulence in the fourth quarter of 2018.

"Despite this dovish tone, we are sceptical", Schenker said in a note.

The head of the Fed, once confirmed by the Senate, can only be removed "for cause", not a policy disagreement. Powell said he has no meeting scheduled with Trump.

The Fed's interest-rate and bond portfolio policies "were at the top of the list of things we were concerned about, which is why the statement Powell made today is so supportive of the market", Orlando said. This response no doubt helped the market to recover on Friday.

A strong jobs report from the Bureau of Labor Statistics also likely quelled some fears that the U.S.is part of a broader economic deceleration.

The world's biggest economy expanded well above potential last year and, along with USA consumers, is expected to remain strong through this year. "There aren't signs of significant economic weakness".

Building on a comment by Yellen that the Fed in the past has often killed expansions by jacking up rates to fight too-high inflation, Bernanke said he didn't see anyone "hiding behind the curtain" waiting to slay the current upturn, including the central bank. "Powell is definitely trying to calm the markets".

"My interpretation is that the markets did see and put emphasis on the downside risks to growth and some of the softening data coming out of China and some of the European countries".

In contrast to the recession chatter recently making the rounds in financial markets, Powell delivered a positive assessment of the USA economic outlook to the American Economic Association's annual meeting. Articles appear on euronews.com for a limited time.

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