Wall Street roars back on robust jobs report, dovish Powell remarks

Wall Street roars back on robust jobs report, dovish Powell remarks

Wall Street roars back on robust jobs report, dovish Powell remarks

Stocks surged on Friday after the Labor Department reported USA firms created 312,000 jobs in December, and Powell said the Fed would be flexible in deciding on any further rate increases. He also said that he would not resign if asked to do so by U.S. President Donald Trump. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Stocks rose even further after Federal Reserve Chairman Jerome Powell said the central bank will be flexible in deciding if and when it raises interest rates. Average hourly pay was up 3.2% compared to a year earlier.

Yellen went on to say that although Trump has the right to comment on the Fed, it is a slippery slope because it could potentially undermine the investor and consumer confidence in the Fed to make the right decisions for the country's economic policy.

Stocks opened the day higher after the Labor Department reported that nonfarm payrolls in the USA increased in December by 312,000, well above consensus estimates of 177,000 jobs created.

"If we ever came to the conclusion that any aspect of our plans" was causing a problem, he said, "we wouldn't hesitate to change it". The Fed has worked to gradually increase interest rates over the past couple years, unnerving investors who anxious the Fed could bring about a recession by hiking rates too quickly. This response no doubt helped the market to recover on Friday.

Speaking after months of volatility in world financial markets, and just hours after a monthly jobs report suggested the US economy remained robust, Powell's soothing comments initially pushed stock indexes higher.

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

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But the report could show signs of where things are headed for 2019 in America amid continued trade uncertainty and as tax cut effects wear off.

Kudlow argued the Federal Reserve is overly concerned about inflation at the risk of stunting economic growth.

"The markets are feeling better that the Fed is not strangling the overall economy and perhaps forcing it into a recession, and that removes a monetary policy concern that has been hanging over the market for the past few months", said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC.

"My interpretation is that the markets did see and put emphasis on the downside risks to growth and some of the softening data coming out of China and some of the European countries".

The Fed's tightening cycle includes both rate hikes and the gradual shedding of its more than $4 trillion (3 trillion pounds) in assets.

Powell also said the Fed is monitoring the financial markets despite criticism from some analysts that the central bank was ignoring the market's recent heightened volatility. Articles appear on euronews.com for a limited time.

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