Wall Street surges on strong jobs report, dovish Powell comments

Wall Street surges on strong jobs report, dovish Powell comments

Wall Street surges on strong jobs report, dovish Powell comments

Federal Reserve Chairman Jerome Powell said Friday he has no plans to resign, despite President Donald Trump's harsh criticism about his job performance, according to Reuters.

Private economists viewed Powell's comments as a strong signal that the Fed, which in December had projected another two rate hikes in 2019, may end up deciding to pause hikes for several months.

Powell once again reiterated the Fed's policy is not on a pre-set path, emphasizing at the same time the positive momentum of data and ruled out any concerns over inflation. "Powell's change in tone is appropriate and we expect a similar, more cautious tone to continue in light of increased uncertainties".

The U.S. central bank hiked interest rates four times last year, including in December when policy-makers' forecasts pointed to two more rises this year.

A new jobs report on Friday showed USA employers added more than 300,000 jobs in December - well above expectations.

"We're listening carefully.to the message that markets are sending and we'll be taking those downside risks into account as we make policy going forward", he said. Powell also told the outlet that, even if he's asked, he will not resign.

The next meeting of the Federal Open Market Committee is set for January 29-30, and Powell plans to hold a press conference after that gathering as he will after each FOMC meeting going forward. Sliding equity prices, weakness overseas and mixed economic data at home have prompted calls for the Fed to put rates on hold, but the U.S. labor market remains strong. A third Fed president, Thomas Barkin of Richmond, said he is hearing more concerns about economic risks and trade. Fed watchers have said that the bar is very high for the president to remove Powell "for cause" as the law appears to require, provided Powell decides to fight the dismissal in court.

Powell said the Fed will act on the current normalization of the balance sheet if conflicts with the Fed's goals arise. "The Fed is going loco and there's no reason for them to do it".

Mr Trump named Mr Powell to the helm of the Fed at the start of the year but has been a frequent and vocal critic, blaming Mr Powell and the Fed for raising rates which he says pose a threat to his economic agenda - an unprecedented public berating that breaks with recent norms.

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