Wall Street rallies on Powell comments, jobs report

Powell January 4 2019 EURUSD chart jumping

On December 19, the Federal Reserve increased the interest rate for the fourth time in 2018 - from 2.25 percent to 2.5 percent.

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.

"Despite this dovish tone, we are sceptical", Schenker said in a note.

Speaking at the American Economic Association's annual meeting, Powell waved off criticisms from the Oval Office, such as when Trump said he was "not even a little bit happy" with Powell's performance, saying he had not received any direct communication from the White House about the Fed's actions, including recent rate hikes. Data released earlier on Friday showed USA employers added the most workers in 10 months as wage gains accelerated.

"The markets are feeling better that the Fed is not strangling the overall economy and perhaps forcing it into a recession, and that removes a monetary policy concern that has been hanging over the market for the past few months", said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC.

He added: "We're listening with sensitivity to the message that markets are sending and we're going to be taking those downside risks into account as we make policy going forward".

He also defended the Fed's rate rises, pointing to strong economic data that suggest businesses and households can handle the higher costs. A third Fed president, Thomas Barkin of Richmond, said he is hearing more concerns about economic risks and trade.




The index gave away part of the post-Payrolls gains to the 96.60 region as market participants continue to gauge the speech by Fed's Jerome Powell.

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

Powell called the employment figures a "very strong report", though he showed no anxiety about the advance in wages.

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

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.

Trump has slammed Powell for rate hikes, meant to keep the economy from overheating, and last month polled advisers about whether he could fire the Fed chief, according to multiple reports.

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