Signs that the Federal Reserve could hold off on further interest rate hikes coupled with a booming jobs report sent stocks on Wall Street surging to close a volatile first trading week for the New Year.
After yesterday’s Apple-induced slide, and in the face of economic indicators that signaled a potential slowdown in global and domestic growth, the chairman of the Federal Reserve, Jerome Powell, said that the central bank would be “patient” when it comes to raising interest rates.
That news, coupled with a strong jobs report, sent stocks rocketing up. The Dow Jones Industrial Average climbed 746.9 points, or roughly 3.3 percent, while the Nasdaq shot up 4.3 percent, or 275.4 points.
It wasn’t just the Fed chairman’s observations about the potential for rate hikes in 2019 that had investors buying, but assurances about Powell’s job security in the face of increasing pressure from President Trump.
Speaking at a panel discussion of the American Economic Association alongside former Federal Reserve chairs Janet L. Yellen and Ben Bernanke, Powell said that he would not resign if asked by the president.
Immediately after Powell’s comments stocks began surging.
“With the muted inflation readings that we’ve seen coming in, we will be patient as we watch to see how the economy evolves,” Powell was quoted as saying in The Washington Post. “We’re always prepared to shift the stance of policy and to shift it significantly if necessary.”