Dovish Fed Chief Powell Delivers What the Markets Wanted

07 January, 2019, 08:58 | Author: Sue Riley
  • Dow surges 600 points on Fed chairman’s remarks jobs report

In response to criticism from President Donald Trump, Federal Reserve Chairman Jerome Powell said he would not resign if he were asked.

United States jobs growth increased at a higher rate than expected in December according to the latest data, as employers hired the most workers for 10 months and wages also rose. "We don't believe our issuance is an important part of the story", he said.

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

Powell gave as an example the fact that in 2016, when Janet Yellen was Fed chair, the central bank began the year with a projection that it would raise rates four times that year but ended up raising rates only once because the economy hit a soft-patch.

Federal Reserve Chair Jerome "Jay" Powell took steps to reassure financial markets on Friday, saying that the United States central bank would be "patient" about rate rises.

The tech-heavy Cheddar 50 Index, which measures the performance of Cheddar's 50 top companies ー from Apple ($AAPL) to GM ($GM) ー gained 5.4 percent on Friday, amid broader market gains. But some investors have anxious that that process could push long-term rates higher at a time when the economy was slowing. "We're hearing a lot from different groups of people about the role the balance sheet normalization may be playing in the market", Powell said.

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.

More news: The Whiteboard: The Chicago Bulls got a good return for Justin Holiday

The head of the Fed, once confirmed by the Senate, can only be removed "for cause", not a policy disagreement.

In December, Powell said that the Fed's balance sheet reduction was on "autopilot".

"We will be prepared to adjust policy quickly and flexibly and to use all of our tools to support the economy should that be appropriate to keep the expansion on track", he said, adding "there is no pre-set path for policy". Powell said last week he wouldn't resign if the president asked him to step down.

"I found it actually quite surprising how benign markets were for such a long time, despite the risks of trade wars and other things that were going on", Bernanke said in an observation that's shared privately by some Fed officials.

A report Friday from JPMorgan Chase said trends in financial markets suggest investors have priced in around a 60 percent chance of a recession, while economists have put the odds of a recession within one year at around 40 percent. But it has been gradually reversing that stance over the past year, although the balance sheet still remains above $4 trillion.

In Atlanta, Powell said Fed policy is flexible and the central bank is "listening carefully" to markets.

"Longer-term bonds have sold off here today in price", said Tim Ghriskey, chief investment officer at Inverness Counsel in NY.


  • Bautista topples Djokovic, will face Berdych in Qatar final

    Bautista topples Djokovic, will face Berdych in Qatar final

    Open a year ago in a spectacular return to form after elbow surgery, missed the chance to reach his sixth straight final. That game he eventually lost, but asked if he was playing too much, Djokovic simply said: "I'm fine, I'll be fine".
    Nadal withdraws from the Brisbane International

    Nadal withdraws from the Brisbane International

    Despite an injury-curtailed 2018 season, Nadal managed to win five titles past year , including a record-extending 11th French Open title that took his Grand Slam tally to 17.
    Greece beats the U.S.  on Serena Williams's return

    Greece beats the U.S. on Serena Williams's return

    As a result of the win, Switzerland progress through to the final on Saturday, while the U.S. will next take on Great Britain. Federer's response? "It's the age of social media", he said, laughing at the prospect of Williams' plan.
  • Elizabeth Warren Takes Weekend Trip To Iowa

    Elizabeth Warren Takes Weekend Trip To Iowa

    Trump even went as far as to say that Warren did a bad job at showing America proof of her Native American ancestry. Democrats Lukewarm to Warren", the surprising headline said .
    Injuries a worry for Sarri as Chelsea beat Palace

    Injuries a worry for Sarri as Chelsea beat Palace

    He's a proven goalscorer through all the age groups at (former club) Chelsea and England. He will provide an attacking threat as a good center-forward should provide.
    Major Galaxy S10 Leak Shows Design Up Close

    Major Galaxy S10 Leak Shows Design Up Close

    The 5G Galaxy S10 version, meanwhile, should be available in certain months at some point in the first half of 2019 . However it might not be the ultrasonic in-display fingerprint sensor (expected to feature on Samsung Galaxy S10 ).
  • Cheteshwar Pujara hits another ton as India make impressive start in Sydney

    Cheteshwar Pujara hits another ton as India make impressive start in Sydney

    There wasn't much help from the pitch for the two pacers Shami and Jasprit Bumrah (0-43) who started proceedings. Kohli placed Rahane closer to short mid-wicket and Mohammed Shami bowled it fuller on the right-hander's pads.
    Pelosi elected speaker, will lead Dems confronting Trump

    Pelosi elected speaker, will lead Dems confronting Trump

    As a result, around 800,000 public workers have been unpaid, with about a quarter of the federal government closed for two weeks. Republican Senate Majority Leader Mitch McConnell's office said he would attend the briefing, which is set for Wednesday.
    Van slams into pedestrians on Tokyo road, 9 injured

    Van slams into pedestrians on Tokyo road, 9 injured

    Police inspect a auto whose driver rammed his vehicle into crowds on Takeshita street in Tokyo early January 1, 2019. They said a man is in custody and those injured were in a "serious" but not life-threatening condition.
  • China and USA  to hold trade talks in Beijing next week

    China and USA to hold trade talks in Beijing next week

    The risks to both economies have intensified since the last round of tit-for-tat tariffs in September. USTR said the U.S. delegation would also include under secretaries from the U.S.
    Robert Pires sends a message to Unai Emery about Lacazette!

    Robert Pires sends a message to Unai Emery about Lacazette!

    ARSENAL host Fulham in their first match of 2019 as they look to recover from two terrible Christmas away days. Looks like Ozil will not be joining Aaron Ramsey in leaving the club in the next two transfer windows.
    Syria is sand and death, says Trump

    Syria is sand and death, says Trump

    That changed, however, after US President Donald Trump announced last month that US forces will be leaving Syria. After discussions with the president and the Chairman of the Joint Chiefs of Staff Gen.


Canadian teenager Andreescu sends Williams packing in Auckland
From there the young Canadian reeled off 11 games in a row before a Williams rally briefly prolonged the deciding set. In fact, on the way she defeated 2 former world no.1 such as Caroline Wozniacki and Venus Williams .

Cathay Pacific ticket mistake: First-class for $675
It sold business class tickets for HK$4600 ($875) for return flights from Los Angeles to both Shanghai and Bangkok. Business-class seats went for less than $1,000, and there were also cheap premium flights to Canada on offer.

Chelsea frustrated as Gunn shines in stalemate
In the last few matches we were in control against every team but at the moment it's not easy for us to score the first goal . Chelsea remain in fourth on 44 points, just three ahead of Arsenal in the race to qualify for the Champions League.

Rashida Tlaib: 'We're Going to Impeach the Motherf*cker'
Alongside Ms Omar and Ms Tlaib , Sharice Davids and Deb Haaland became the first Native American women in Congress. After the furor over the comment hit social media, Tlaib responded from her Twitter account on Friday.

Tesla delivers record number of vehicles, cuts prices by US$2,000
Global deliveries to Europe and China will start next month and it will launch a right-hand drive version later in the year. But the company is unprofitable for the first nine months of 2018, and cash flow remains a concern for investors.

NASA spacecraft sends images of icy object past Pluto
The black-and-white photo was taken from about 30,000 miles away, as New Horizons sped toward its target at 32,000 miles per hour. In 2015, the spacecraft passed Pluto, providing the first images of a world once considered our ninth planet.

Live Updates On The New Horizons Flyby Of Ultima Thule
New Horizons sweeps past Ultima Thule - described as a bullet intersecting with another bullet (computer simulation). At a speed of 31,500 miles per hour (50,700 kph), New Horizons could easily be knocked out by a rice-sized particle.

Australia v India: fourth Test, day one
Traditionally, the New Year's Test is always played at the iconic Sydney Cricket Ground , and it is no different this year. Indian middle-order's contribution is also one of the biggest factors which makes India favourites to win the series.

Xi warns Taiwan independence is 'a dead end'
All people in Taiwan must "clearly recognise that Taiwan independence would only bring profound disaster to Taiwan", Xi said. Ahead of Xi's speech Taiwanese President Tsai Ing-wen defended self-rule and said Beijing must respect its sovereignty.

Xi, Putin exchange New Year greetings
The two leaders also failed to meet in Paris during the 100th anniversary of the Armistice. Putin wished "well-being and prosperity to the British people", the Kremlin said.