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Saturday 5 January 2019
Powell says he would reject any Trump request to resign

By MARTIN CRUTSINGER times that year but ended
AP Economics Writer up raising rates only once
WASHINGTON (AP) — Fed- because the economy hit
eral Reserve Chairman a soft-patch.
Jerome Powell said Friday Appearing on a panel with
that he will not resign if his two predecessors — Yel-
asked to do so by President len and Ben Bernanke —
Donald Trump, and that he Powell also said that the Fed
is prepared to be patient in could alter its approach to
deciding when to raise in- trimming its huge balance
terest rates again. sheet if it determines such a
Both of those messages change is needed.
cheered stock market in- The pace of Fed rate hikes
vestors who had been wor- and the lowering of the bal-
ried about Trump's repeat- ance sheet, which tends to
ed attacks on his hand- put upward pressure on in-
picked choice to lead the terest rates, had both been
nation's central bank and concerns of investors in re-
also the Fed's seemingly in- cent months.
exorable march to higher The stock market has seen
rates. stomach-churning declines
"There is no pre-set path for since October, a devel-
policy," Powell said during opment that Trump has
an appearance at a con- blamed on the Fed's con-
ference of economists in tinued rate hikes, although
Atlanta. "With the muted the president's trade dis-
inflation readings we have pute with China as well
seen coming in, we will be as concerns about global
patient as we watch to see economic growth also
how the economy evolves." played a part in the market
Private economists viewed volatility.
Powell's comments as a Federal Reserve Chairman Jerome Powell speaks at a conference, Friday, Jan. 4, 2019, in Atlanta. The Fed had increased the
strong signal that the Fed, Associated Press size of its balance sheet
which in December had four-fold to a record $4.5
projected another two rate several months. they will do just one hike or be on shaky legal ground trillion in an effort to push
hikes in 2019, may end up "With Chairman Powell's maybe no hikes this year," if he tried to fire Powell. long-term interest rates low-
deciding to pause hikes for remarks today, I would say said Sung Won Sohn, chief Under the law that gov- er. But it has been gradually
economist at SS Econom- erns the Federal Reserve, reversing that stance over
ics. "Powell is definitely try- a president can only re- the past year, although the
ing to calm the markets." move a Fed chairman for balance sheet still remains
Wall Street, which opened cause. Courts in cases that above $4 trillion. But some
sharply higher after a re- involved other agencies investors have worried that
port showing 312,000 jobs have interpreted that lan- that process could push
gained in December, guage to not cover policy long-term rates higher at
surged even higher during differences. a time when the economy
Powell's appearance. The Asked if he would resign if was slowing.
Dow Jones industrial aver- Trump asked him to do so, Powell on Friday stressed
age finished the day up Powell responded with a that the Fed was prepared
746 points or 3.3 percent. short "no." to adjust the pace at which
Powell called the jobs re- Powell's willingness to be it trimmed the balance
port "very strong" and said flexible on interest rates was sheet if necessary to sup-
he was also encouraged welcome news to investors, port economic growth.
by the rise in the labor many of whom worried that While Trump has sent out a
force participation rate Fed chair risked cutting off number of tweets criticiz-
and gains in wages, which the current economic ex- ing Powell and calling the
he said "for me at this time pansion by continuing to Fed the biggest threat to
does not raise concerns raise interest rates despite the economy, Powell said
about too high inflation." signs the U.S. economy was that he had not received
Trump has complained that cooling off a little. any direct pressure from
the Fed has pushed rates On Friday, Powell said, "We the White House. Asked if
higher despite the fact that are always prepared to he had had any face-to-
there is no evidence that shift the stance of policy face meetings with Trump,
inflation was getting out of and to shift it significantly Powell said he had not al-
control. if necessary" to meet the though he said previous
The president's attacks had goals of maximum employ- Fed leaders have had dis-
become so intense that ment and stable prices. cussions from time to time
they had raised concerns Powell gave as an example with previous presidents.
that he might be consider- the fact that in 2016, when Asked if any future meet-
ing firing Powell, a develop- Janet Yellen was Fed chair, ing with Trump was sched-
ment which could send the the central bank began uled, Powell said, "I have
market into a tailspin. the year with a projection no news on that. Nothing is
Trump would appear to that it would raise rates four scheduled."q