Fed Chair Powell says would reject Trump request to resign

Ivan Schwartz
January 6, 2019

Federal Reserve Chairman Jerome Powell signaled the central bank could pause interest-rate increases if the USA economy weakened and pledged he will stay at his post even if President Donald Trump presses him to resign.

The Fed chairman, responding to a question about what he would do if Trump asked him to step down, said he would not resign. "With the muted inflation readings we have seen coming in, we will be patient as we watch to see how the economy evolves". "Powell is definitely trying to calm the markets".

Echoing a more sympathetic tone recently espoused by some of his colleagues, Powell said the Fed was "listening" to markets and would balance the steady flow of strong economic data against the array of risks - from slowing global growth to worries about the U.S. The Fed said in December it anticipated raising rates twice in 2019.

The Dow Jones Industrial Average climbed 746.94 points (3.29 per cent) to end the week at 23,433.16.

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

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Powell's appearance in Atlanta was his first since last month's rate increase and a public lashing from Trump, who according to sources asked aides about his power to fire the Fed chairman.

The pace of Fed rate hikes and the lowering of the balance sheet, which tends to put upward pressure on interest rates, had both been concerns of investors in recent months.

Asked if any future meeting with Trump was scheduled, Powell said, "I have no news on that".

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). Markets, however, have mostly tumbled since October on fears of a global economic slowdown and the ongoing U.S.

Earlier on Friday, the Labor Department reported that nonfarm payrolls jumped by 312,000 jobs, well above market expectations, while wages and labour force participation rose, all signals of sustained economic strength. "The Fed has wilfully ignored trade and interest rate risks while talking a hawkish game".

Other reports by GizPress

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