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Another day, another reversal in the stock market

Another day, another reversal in the stock market”

"If the president asked you to resign, would you do it?" the moderator asked Powell.

Both of those messages cheered stock market investors who had been anxious about Trump's repeated attacks on his hand-picked choice to lead the nation's central bank and also the Fed's seemingly inexorable march to higher rates.

Global stocks are jumping Friday as investors welcomed news of trade talks between the US and China next week and the USA government reported a big increase in hiring in December.

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.

A strong jobs report from the Bureau of Labor Statistics also likely quelled some fears that the U.S.is part of a broader economic deceleration.

While it's not a real-economy measure, the Fed closely watches market volatility because it can feed through to consumer and business sentiment and the real economy. "Can we wait?", Cleveland Federal Reserve Bank President Loretta Mester said in an interview with Reuters. The market bounce came after a volatile December selloff in which traders grew increasingly skeptical of the Fed's upbeat forecasts and plans to keep hiking interest rates in 2019.

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

The President has repeatedly criticized the Fed's increasing monetary restrictions and interest rates, which he blamed for the market drop in a phone call with Fox News host Shannon Bream in October. Do we need to move more, faster?

"The problem in my opinion is Treasury and the Fed", Trump said.

The US central bank has faced criticism from US President Donald Trump for moving too quickly to increase rates. Data released earlier on Friday showed United States employers added the most workers in 10 months as wage gains accelerated.

Powell told the panel in Atlanta that he has not received any communications from the White House so far and has not scheduled a meeting with Trump.

The world's biggest economy expanded well above potential last year and, along with USA consumers, is expected to remain strong through this year.

A report Friday from JPMorgan Chase said trends in financial markets suggest investors have priced in around a 60 percent chance of a recession, while economists have put the odds of a recession within one year at around 40 percent.

Powell "said exactly what the markets wanted to hear", said Gregori Volokhine of Meeschaert Financial Services.

The Fed's tightening cycle includes both rate hikes and the gradual shedding of its more than $4 trillion in assets.

The Fed chairman added: "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".



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