Published: Mon, January 07, 2019
Health Care | By Cedric Leonard

Dollar reels from Fed's chief remark

Dollar reels from Fed's chief remark

US Federal Reserve Chairman Jerome Powell said during the annual meeting of the American Economic Association in Atlanta on Friday that he would not leave his post if President Donald Trump asks him to resign.

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

"The market's been grappling with growth, the Fed and China", said Tony Roth, chief investment officer at Wilmington Trust in Wilmington, Delaware.

When asked whether he would comply with a resignation request by Trump, Powell said, "No".

U.S. Treasury yields jumped on Friday, triggering a massive break in the Treasury notes and Treasury bonds futures markets. That means that both the headline and the less-volatile core index are coming in below the Fed's goal, a possible argument for not raising rates, all else equal. Some analysts said investors were acting as if a recession was on the horizon, despite a lack of evidence that the USA economy is struggling. We need to be very vigilant. "We may be where we need to be".

The head of the Fed, once confirmed by the Senate, can only be removed "for cause", not a policy disagreement.

The number of jobs added to the economy in December surged more than expected, and the figures from October and November were revised higher.

President Trump and Democratic leaders failed to strike a deal on Friday to end a partial shutdown of the USA government as they fought over Trump's request for $5 billion to fund a wall on the border with Mexico lawmakers said.

Trump claims he 'essentially fired' Mattis
David Norquist, the Pentagon's comptroller, will perform the duties of the deputy as well as retain his current title. He has more than 28 years of federal financial management experience, according to his official Pentagon biography.

Then the market opened much higher following a that showed a gain of 312,000 nonfarm payrolls in December.

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

United States and European stocks got a boost as the stronger-than-expected jobs report soothed some concerns of slowing economic growth. Yet signs are growing that Trump's tit-for-tat trade war with China is taking a toll: this week, tech giant Apple and grains trader Cargill warned about weaker sales in China.

But Jason Schenker of Prestige Economics suggested the Fed could still take a hard line.

"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.

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. "Some years ago, we decided that rate policy was going to be the active policy tool and the balance sheet would be allowed to shrink gradually and predictably in the background", he said.

The US dollar retreated against the euro on Friday, giving up all the gains logged after a robust US jobs report, following comments from Federal Reserve Chairman Jerome Powell that the US central bank will be sensitive to the downside risks the market is pricing in.

Like this: