Economy

Fed chair Jerome Powell to speak on market concerns Thursday

Fed chair Jerome Powell to speak on market concerns Thursday

He also said he would "be patient" as the central bank determines when to hike interest rates next.

With no sign of excessive inflation or outsized risk in financial markets, Powell said the Fed would be "waiting and watching" in coming months.

Powell also repeated his comments that attacks by President Donald Trump on the Fed's rate hike policies were not having an impact on Fed decisions, which he said were aimed at achieving the Fed's two goals of maximum employment and stable prices.

Earlier: Jerome Powell has been moving markets - up and down - lately.

"Growth prospects in other economies around the world have moderated somewhat in recent months, and overall financial conditions have tightened materially, " he said in the text of a speech late Thursday in NY.

"I don't see a recession", he told a gathering of the Economic Club of Washington.

That prospect has cheered markets, which had grown anxious that the Fed was not taking into account a variety of headwinds that could slow US growth this year.

Steelers president: 'Hard to envision' WR Antonio Brown being back
However, Brown will be 31 when the 2019 season kicks off so if the asking price is too high, San Francisco may not be interested. Antonio Brown may not have asked to be traded by the Steelers, but Pittsburgh is certainly entertaining the option.

Powell and others have been less demonstrative and noted that economic data remains strong, particularly after a recent payroll report that showed more than 300,000 jobs added in December.

While market reaction to Powell's comments was fairly muted, the S&P 500 index was down about 0.4 percent and 10-year Treasury yields hit a session high on Thursday afternoon, reflecting investors' sensitivity to any hint about how much longer the Fed will continue to pare its roughly $4-trillion portfolio of bonds.

"There is no such plan", Powell said.

United States central bankers are refining their message after the hawkish tone of their Dec 19 statement and forecasts for further rate hikes in 2019 roiled financial markets. "That was conditional on a very strong outlook for 2019", which may or may not materialize, with the Fed adjusting policy accordingly. The unemployment rate stands at 3.9 per cent and central bankers expect it to average 3.5 per cent in the final three months of this year.

Many business leaders remain optimistic about the U.S. economy this year, despite higher interest rates and large swings in the stock market. Powell and several other Fed officials have recently begun stressing the idea that the Fed can afford to be "patient" when it comes to raising rates because inflation is so low. "The principal worry we have is global growth" in Asia, Europe and elsewhere.

"If we have an extended shutdown, I do think that would show up in the data pretty clearly", Powell said.

However, the Fed chief is less bullish on the world economy.


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