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

USA stocks rally after strong jobs data, dovish Fed comments

USA stocks rally after strong jobs data, dovish Fed comments

He added that, if needed, "we are always prepared to shift the stance of policy and to shift it significantly".

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.

A new jobs report on Friday showed U.S. employers added more than 300,000 jobs in December - well above expectations.

The Federal Reserve, which has raised interest rates four times in 2018, is likely to push ahead with two more rate increases this year.

Powell called the employment figures a "very strong report" and showed no concern about the advance in wages.

While most of the economic data he has seen coming have been quite solid, Powell also made clear he was not ignoring signals from financial markets.

In response to questions, Powell also signaled a willingness to include changes to the Fed's gradual run-off of its balance-sheet in any review of monetary policy.

Powell said the Fed will act on the current normalization of the balance sheet if conflicts with the Fed's goals arise.

During an amicable discussion that had Powell and his immediate past predecessors, Janet Yellen and Ben Bernanke, expressing similar views on the economy and on the need for the Fed to set its policy independently of political considerations.

The commander-in-chief has also ripped the Fed on Twitter and in interviews. The Fed chairman, responding to a question about what he would do if Trump asked him to step down, said he would not resign.

Powell seemingly acknowledged that, despite strong economic data, investors are anxious after Wall Street's rocky December, which saw the Dow Jones Industrial Average and S&P 500 post their worst performances since the Great Depression (however, that same month, the US economy added 312,000 jobs - nearly double the number that analysts were anticipating - pushing the markets higher on Friday).

Average hourly earnings rose 3.2% in December, the quickest pace since 2009.

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