Fed Chief Jerome Powell Says He Won't Resign If Trump Asks

Desiree Burns
January 5, 2019

The Dow Jones Industrial Average thrust off its recent bearish trend during mid-day trading on Friday, surging to a 700 point gain after Federal Reserve Chairman Jerome Powell reassured investors that the central bank would take stock market conditions into account when deciding whether to hike interest rates.

US stocks were pummelled on Thursday after Apple slashed its revenue forecast due to weak demand in China and a report showed US manufacturing activity slumping to a two-year low, reviving fears about a global economic slowdown in the wake of the US-China trade war.

The Labour Department reported Friday that United States employers added a net 312,000 new positions in December, smashing economists' expectations.

Wall Street stocks were in rally mode on Friday morning (Jan 4) following strong United States jobs data and after the Federal Reserve head acknowledged rising investor angst over global growth.

Nonfarm payrolls surged by 312,000 jobs in December, the largest gain since February and sailed past economists' expectations of 177,000 jobs.

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. Wages also rose, while the unemployment rate improved, the Labor Department said.

Fed Chief Jerome Powell Says He Won't Resign If Trump Asks

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.

While the report allayed fears over slowing economic growth, there were some concerns that the healthy data would let the Fed stick with its projection for two interest rate hikes this year.

"I would say that meetings between presidents and Fed chairs do happen", was all that Powell said when asked if he would meet with the president.

The trade-sensitive industrials sector rose 2.7 percent after Beijing announced a new round of trade talks with Washington on January 7-8 to try and resolve their dispute.

After its worst showing for any December since 1931, the broad-based S&P 500 climbed 2.6 per cent to 2,510.67, while the tech-rich Nasdaq Composite Index advanced 3.2 per cent to 6,667.73.

Despite the rally, USA stocks are anchored near mid-2017 lows, with a chunk of the losses coming last month in what was the S&P's worst December since the Great Depression.

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