Economy

Powell says he would reject any Trump request to resign

Powell says he would reject any Trump request to resign

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.

Both of those messages cheered stock market investors who had been anxious about Trump's repeated attacks on his hand-picked choice to lead the nation's central bank and also the Fed's seemingly inexorable march to higher rates.

Powell had been sitting next to former Federal Reserve chairmen Janet Yellen and Ben Bernanke when he was asked about his impending meetings with the President regarding Fed policy, which the President has emphasized in the past as the number one problem with the economy.

The Dow finished up 3.3 percent, or almost 750 points, to end the week at 23,433.16, more than making up for the 2.8 percent slide on Thursday amid worries over slowing growth.

When asked whether he would comply with a resignation request by Trump, Powell said, "No".

Earlier on Friday, the Labor Department reported that nonfarm payrolls jumped by 312,000 jobs, well above market expectations, while wages and labour force participation rose, all signals of sustained economic strength.

Penn State's Basketball Coach Suspended For Shoving Player
More importantly, the second-ranked Wolverines are now 3-0 in the Big Ten conference with a road game against in looming Sunday. While Penn State shot a respectable 42 percent from the field overall, the Nittany Lions were just 1-of-14 from 3-point range.

Those back-to-back market-friendly developments helped U.S. and European stock bourses surge higher and set aside for now nervousness over trade wars, a United States government shutdown and a slowing economy that have pressured stocks for most of the last month.

Powell triggered an acceleration in the selling pressure when he said, "As always, there is no preset path for policy". "Can we wait?", Cleveland Federal Reserve Bank President Loretta Mester said in an interview with Reuters.

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. This is a nod to Trump but also implies no rush to raise rates. The stock market has seen stomach-churning declines since October, a development that Trump has blamed on the Fed's continued rate hikes, although the president's trade dispute with China as well as concerns about global economic growth also played a part in the market volatility.

At the same time, he reassured investors of the Fed's flexibility. It marked the ninth time the Fed has raised interest rates since 2015.

Powell on Friday stressed that the Fed was prepared to adjust the pace at which it trimmed the balance sheet if necessary to support economic growth. "Some years ago, we decided that rate policy was going to be the active policy tool and the balance sheet would be allowed to shrink gradually and predictably in the background", he said.

"When you get such a strong jobs report and a Fed chairman saying he's patient and flexible it sends a message to the markets that we're moving in the right direction", said Robert Pavlik, chief investment strategist, senior portfolio manager at SlateStone Wealth.


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