Published: Sat, January 05, 2019
Markets | By Otis Pena

Powell says he would reject any Trump request to resign

Powell says he would reject any Trump request to resign

Head of the US Federal Reserve, which sets interest rates in the world's largest economy, has said he is "listening carefully" to market fears of a global slowdown, suggesting there would not be an imminent rate hike despite "very good" domestic jobs data in the US.

He also added that the Fed was prepared to adjust its approach to interest rate hikes should that policy appear to cause problems with the economy.

Powell, who was appointed by Trump, also said he had not received any direct word from the White House about his job performance, and that no meeting with the president had been scheduled.

The Fed chief stressed that the economy remained on track and that the job market was quite strong.

The stock market has seen stomach-churning declines since October, a development that Trump has blamed on the Fed's continued rate hikes, although the president's trade dispute with China as well as concerns about global economic growth also played a part in the market volatility.

"Everyone would be better off if it was clear that the Fed is making its decisions based on its mandate and on its assessment of the long-term needs of the economy, which I'm completely confident that they will do", Bernanke said.

Powell says he would reject any Trump request to resign

Mr Trump named Mr Powell to the helm of the Fed at the start of the year but has been a frequent and vocal critic, blaming Mr Powell and the Fed for raising rates which he says pose a threat to his economic agenda - an unprecedented public berating that breaks with recent norms. Powell responded with a terse "No" when asked if he would resign if Trump requested him to do so.

Powell's comments were immediately cheered by financial markets, which were already rallying on the basis of a strong unemployment report that showed 312,000 jobs were created in December.

A new jobs report on Friday showed U.S. employers added more than 300,000 jobs in December - well above expectations. Wages and labor force participation both rose, signaling sustained economic strength. "However, we look for the Fed to wait until May 1 to hike rates again".

While not a change in policy, it was a nod to market concerns that the Fed had a key decision on "auto-pilot", as Powell put it last month, even as it pledged to be dependent on economic data.

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".

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