Wall Street roars back on robust jobs report, dovish Powell remarks
08 January, 2019, 00:20 | Author: Judith Dennis
"We are in a new world", Mester said, where the obvious need to raise rates has given way to a situation where economic growth is expected to slow, wages are rising on the basis of low unemployment, interest rate sensitive sectors of the economy like housing have ebbed, and the unemployment rate has roughly "stabilized" at a low level.
The Fed, which hiked benchmark US interest rates four times past year including in December, is however not on a preset path and could pause policy tightening as it did in 2016 when global growth concerns led to doubts about the USA economic recovery, he said.
"We wouldn't hesitate to change it and that would include the balance sheet".
He also defended the Fed's rate rises, pointing to strong economic data that suggest businesses and households can handle the higher costs.
"Barring further tightening in financial conditions that would negatively impact economic activity, the very strong labor market picture support (s) our expectations that the Fed will keep a tightening bias in 2019 and hike rates twice next year". Most of the companies in those industries stand to do better in times of faster economic growth.
The Labour Department reported Friday that United States employers added a net 312,000 new positions in December, smashing economists' expectations.
"Investors and Fed officials will certainly take some comfort from today's stellar jobs report", Oxford Economics said in a research note. Sellers were also driven by a dramatic shift in the tone of U.S. Federal Reserve Chairman Jerome Powell, who reversed his hawkish tone from December to dovish.
U.S. President Donald Trump has called the Fed's rate hikes a mistake and said he was not happy with Powell.
The dollar strengthened. It rose to 108.51 yen from 107.77 yen.
Powell's willingness to be flexible on interest rates was welcome news to investors, many of whom anxious that Fed chair risked cutting off the current economic expansion by continuing to raise interest rates despite signs the US economy was cooling off a little.
Volume on USA exchanges was 8.68 billion shares, compared to the 9.14 billion average over the last 20 trading days. "Powell is definitely trying to calm the markets".
Dallas Fed President Robert Kaplan said on Thursday that planned rate hikes should be halted for now, while on Friday Mester said she sees only one or two rate hikes this year.
"Markets are expressing concerns about global growth in particular and trade negotiations", Powell said at an event in Atlanta. "But it's the first time (Powell has) said anything that's dovish enough for the markets liking".
This is the Trump equivalent of "read my lips, no new taxes" only in this case I don't think he's likely to reverse course. By passing this bill in the Senate but blocking it in the House on Trump's order, Republicans boxed themselves in.
Former US president Jimmy Carter warned on Monday that both countries were increasingly describing each other as threats. He's pushing the Asian nation to reduce trade barriers and stop the alleged theft of intellectual property.
Large numbers of federal contractors are also losing pay in what is already one of the longest shutdowns in U.S. history. "V.P. Mike Pence and group had a productive meeting with the Schumer/Pelosi representatives today", Trump wrote.
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John Legend is the rare exception, stepping up whereas others like Jay Z and Lady Gaga declined to participate. With over 743,000 total interactions across Facebook , Instagram and Twitter , Surviving R.
Apple has been steadily raising the price of its newest and most powerful iPhones each year, with some models now topping $1,000. Major U.S. markets opened 1% lower, with the Dow falling more than 300, then over 600 points in morning trading.
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Treasurys, meanwhile, was last up to 2.584% from 2.557% late Thursday. "China's economy began to slow in the second half of 2018". Beyond Apple, investors were also rattled by the biggest one-month decline in U.S. factory activity since the Great Recession.
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