Wall St. rebounds on robust jobs report, dovish Powell remarks

Fed's Powell Pledges Patience, Sensitivity to Risks in Markets

Equities around the globe rallied on Friday while bond yields rose after sharply declining earlier in the week as USA employment data pointed to economic strength and Federal Reserve Chair Jerome Powell said the US central bank would be patient with monetary policy. Trump's acting chief of staff, Mick Mulvaney, later said that the president knows "now" that he can not fire the Fed chair unless it's for cause. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

And Federal Reserve Chairman Jerome Powell said the Fed will be flexible in its plan to hike interest rates. Microsoft rose 3.1 per cent to $100.41 and Deere gained 3.4 per cent to $148.96.

Appearing on a panel with his two predecessors - Yellen and Ben Bernanke - Powell also said that the Fed could alter its approach to trimming its huge balance sheet if it determines such a change is needed.

"Nothing's been scheduled, I would say that meetings between presidents and Fed chairs do happen", he told moderator and New York Times reporter Neil Irwin. "With the muted inflation readings we have seen coming in, we will be patient as we watch to see how the economy evolves". "We don't believe our issuance is an important part of the story", he said.

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

Trump has recently been complaining vocally that Powell's policy to raise interest rates is what is causing the strong economy to begin to sputter. This response no doubt helped the market to recover on Friday.

The dollar strengthened. It rose to 108.51 yen from 107.77 yen.

Analysts predicted that job reports for January and February will be more of a policy reference for the Fed than the December report as they would provide a clearer picture of how tightened financial conditions affect the USA economy.

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Volume on US exchanges was 8.68 billion shares, compared to the 9.14 billion average over the last 20 trading days. The Fed said in December it anticipated raising rates twice in 2019. They fell even further after a weak manufacturing report suggested the trade war was harming both China and the United States' economy. A third Fed president, Thomas Barkin of Richmond, said he is hearing more concerns about economic risks and trade.

"That's quite welcome", Powell said. "However, we look for the Fed to wait until May 1 to hike rates again".

Mr Powell said he thought the recent market declines reflected concerns about slowing global growth and trade tensions - but are "well ahead of the data".

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

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Powell "said exactly what the markets wanted to hear", said Gregori Volokhine of Meeschaert Financial Services. Articles appear on euronews.com for a limited time.

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