Published: Sat, January 05, 2019
Business | By Eloise Houston

Powell says he would not resign as Fed chair if Trump asked

Powell says he would not resign as Fed chair if Trump asked

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.

Federal Reserve Chairman Jerome Powell on Friday moved to ease concerns in financial markets, saying that while USA economic momentum is solid, the central bank is sensitive to the risks highlighted by investors and will be patient with its monetary policy in 2019.

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

At the conference on Friday, Mr Powell said he has not spoken directly to Mr Trump and would not resign if asked.

Of course, that's a double-edged sword: Strong job numbers are comforting on one hand, but good economic news often lends fuel to the Federal Reserve's interest rate hike plan.

There is "no pre-set path for policy and particularly with the muted inflation themes coming in we will be patient as we see how the economy evolves", Mr Powell said.

Powell says he would not resign as Fed chair if Trump asked
Powell says he would not resign as Fed chair if Trump asked

"We are always prepared to shift the stance of policy and to shift it significantly" if needed, said Powell, who spoke on a panel in Atlanta alongside former Fed chiefs Janet Yellen and Ben Bernanke.

The question about Powell's possible departure arose after Trump expressed disagreement with the Federal Reserve's monetary policy to increase interest rates and the chairman's work overall.

Echoing a more sympathetic tone recently espoused by some of his colleagues, Powell said the Fed was "listening" to markets and would balance the steady flow of strong economic data against the array of risks - from slowing global growth to worries about the U.S. "Can we wait?", Cleveland Federal Reserve Bank President Loretta Mester said in an interview with Reuters.

Powell's Fed hiked rates four times previous year and projections from its December 19 meeting show officials expect two more hikes in 2019.

"I think the Fed is a much bigger problem than China", he told the paper, adding that his "gut" was a more reliable guide to manage the economy than other people's "brains". As well it should have, says Lynch, who expects a "U.S".

"I'll just say that we are listening carefully to that.listening sensitively to the message that markets are sending and we are going to be taking those downside risks into account as we make policy going forward", he said.

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