Dovish Fed Chief Powell Delivers What the Markets Wanted

'No' Jerome Powell won't resign

'No' Jerome Powell won't resign

"We will be patient as we watch to see how the economy evolves", he said.

Shortly thereafter, Federal Reserve Chairman Jerome Powell said the central bank will be more accommodative by exercising patience in raising rates, subduing fears of a hawkish Fed in 2019.

The head of the Fed, once confirmed by the Senate, can only be removed "for cause", not a policy disagreement. But some investors have anxious that that process could push long-term rates higher at a time when the economy was slowing.

The two former central bank chairs also threw their support behind Powell and Fed independence following months of escalating criticism from Donald Trump. Asked if he had had any face-to-face meetings with Trump, Powell said he had not although he said previous Fed leaders have had discussions from time to time with previous presidents.

The increase of 312,000 jobs to the economy last month exceeded economists' expectations of 177,000, according to Reuters.

"This employment report suggests the United States economy still has considerable forward momentum". Wages and labor force participation both rose, signaling sustained economic strength.

USA stocks extended gains on his remarks.

Trump to meet emboldened Democrats in bid to end government shutdown
Senate Democratic leader Chuck Schumer told reporters: "We told the president we needed the government open. She said that was in part a "generational" difference, but also called out Trump for language he has used.

The world's biggest economy expanded well above potential last year and, along with US consumers, is expected to remain strong through this year.

"The Fed has got a communication problem" when it comes to the balance sheet, said Wrightson ICAP LLC chief economist Lou Crandall. Yet signs are growing that Trump's tit-for-tat trade war with China is taking a toll: this week, tech giant Apple and grains trader Cargill warned about weaker sales in China. In the meeting, Powell spoke about what he makes of the USA economy and how he plans to adjust the monetary policy.

Powell triggered an additional surge in the markets after he walked back the comment made in December that shook up investors and made him sound like his sole mission was to reduce the central bank's balance sheet. But it has been gradually reversing that stance over the past year, although the balance sheet still remains above $4 trillion.

While not a change in policy, it was a nod to market concerns that the Fed had a key decision on "auto-pilot", as Powell put it last month, even as it pledged to be dependent on economic data.

Mr Powell said that he did not believe the Fed's removal of stimulus by shrinking holdings of Treasuries and mortgage-backed securities played a major role in the recent market turmoil.

"We are in a new world", Mester said, where the obvious need to raise rates has given way to a situation where economic growth is expected to slow, wages are rising on the basis of low unemployment, interest rate sensitive sectors of the economy like housing have ebbed, and the unemployment rate has roughly "stabilized" at a low level.

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