Stocks cheer Fed chief speech, dollar dips

Wall Street stocks pushed to fresh records Friday, while the dollar sagged as Federal Reserve Chair Jerome Powell said there was no sign of an overheating economy and policymakers expected to continue gradual interest rate increases, reports AFP from New York.

Speaking at the annual gathering of global central bankers in Jackson Hole, Wyoming, Powell said the US economy remained strong and anyone who wanted a job could find one.

He said prices were rising at about the Fed’s target pace of two percent, signaling the US central bank does not expect to accelerate interest rate increases as some investors have feared.

“We have seen no clear sign of an acceleration above two percent and there does not seem to be an elevated risk of overheating,” Powell said in prepared remarks.

“I am confident that the FOMC would resolutely ‘do whatever it takes’ should inflation expectations drift materially up or down or should crisis again threaten.”

The Fed seems to be “doing as good a job as they can not to overshoot” the tightening of monetary policy, said David Levy of Republic Wealth Advisors.

All three major US indices pushed higher, with the S&P 500 notching its first closing record since January and the Nasdaq jumping 0.9 percent to 7,945.98, smashing past a record set last month.

In Europe, London, Frankfurt and Paris all ended the day 0.2 percent higher.

But Powell’s remarks weighed on the dollar.

“Jerome Powell hit the dollar with a fairly dovish set of remarks at Jackson Hole,” said Neil Wilson of Markets.com said in a note to clients.

He said Powell’s speech indicated the Fed was flexible and didn’t want to choke off growth by raising rates too fast.

“The implication is that the Fed won’t be seeking to pre-emptively hike rates and the outlook for 2019 hikes now becomes more complicated.”

Australia’s dollar meanwhile pared losses and Sydney’s stock market closely slightly higher after the country’s governing Liberal Party elected a new business-friendly prime minister, ending a week of political uncertainty.

Sydney’s under-pressure S&P/ASX 200 fluctuated through the day and ended up 0.1 percent after the Liberals elected Scott Morrison as prime minister.

The former treasurer took the reins after beating hardliner Peter Dutton, who had moved to replace Malcolm Turnbull in a shock revolt earlier this week that sent Australian markets spinning.

 

Stocks cheer Fed chief speech, dollar dips

Wall Street stocks pushed to fresh records Friday, while the dollar sagged as Federal Reserve Chair Jerome Powell said there was no sign of an overheating economy and policymakers expected to continue gradual interest rate increases, reports AFP from New York. Speaking at the annual gathering of global central bankers in Jackson Hole, Wyoming, Powell said the US economy remained strong and anyone who wanted a job could find one. He said prices were rising at about the Feds target pace of two percent, signaling the US central bank does not expect to accelerate interest rate increases as some investors have feared. We have seen no clear sign of an acceleration above two percent and there does not seem to be an elevated risk of overheating, Powell said in prepared remarks. I am confident that the FOMC would resolutely do whatever it takes should inflation expectations drift materially up or down or should crisis again threaten. The Fed seems to be doing as good a job as they can not to overshoot the tightening of monetary policy, said David Levy of Republic Wealth Advisors. All three major US indices pushed higher, with the SP 500 notching its first closing record since January and the Nasdaq jumping 0.9 percent to 7,945.98, smashing past a record set last month. In Europe, London, Frankfurt and Paris all ended the day 0.2 percent higher. But Powells remarks weighed on the dollar. Jerome Powell hit the dollar with a fairly dovish set of remarks at Jackson Hole, said Neil Wilson of Markets.com said in a note to clients. He said Powells speech indicated the Fed was flexible and didnt want to choke off growth by raising rates too fast. The implication is that the Fed wont be seeking to pre-emptively hike rates and the outlook for 2019 hikes now becomes more complicated. Australias dollar meanwhile pared losses and Sydneys stock market closely slightly higher after the countrys governing Liberal Party elected a new business-friendly prime minister, ending a week of political uncertainty. Sydneys under-pressure SP/ASX 200 fluctuated through the day and ended up 0.1 percent after the Liberals elected Scott Morrison as prime minister. The former treasurer took the reins after beating hardliner Peter Dutton, who had moved to replace Malcolm Turnbull in a shock revolt earlier this week that sent Australian markets spinning.