Fed officials express caution about pace of future hikes

Federal Reserve Chairman Jerome Powell speaks at the Economic Club of New York's luncheon in New York

Federal Reserve Chairman Jerome Powell speaks at the Economic Club of New York's luncheon in New York

Higher interest rates tend to slow economic growth over time as well as pressure stock prices.

That stood in contrast with comments Powell had made in October when he said that the Fed's policy rate was still a "long way from neutral".

The Federal Reserve on Thursday paved the way for a fourth rate hike in December, but sent a clear signal to investors that it would exert greater flexibility with its plans to ratchet up interest rates in 2019.

In October 2015, when the Yellen Fed was navigating the hard transition from years of super-low interest rates to a cycle of rate hikes, she got the worst grade of her tenure - an average 2.27 out of 5. In an interview Tuesday with the Washington Post, the president complained bluntly and at length about Powell, who was Trump's hand-picked choice to lead the Fed.

Powell "gave the market, and presumably President Trump, exactly what he wanted, which was an admission that the previously proposed path of future rate hikes was probably too aggressive and opening to slowing the rate of hikes", said Oliver Pursche, vice chairman and chief market strategist at Bruderman Asset Management in NY.

The Fed has raised interest rates every quarter this year.

Minutes released yesterday from the Fed's last policy meeting also showed some policymakers believed going above neutral could slow the economy needlessly.

Trump's comments to the Post come a day before Powell's highly anticipated comments at the Economic Club of NY on Wednesday. Responding to the interviewer's comment that he had considered Powell would be a "low-rate person", Trump said: "Well, let's see what happens with Jay Powell".

Powell said in a speech in NY that interest rates remained "low by historical standards" and still provided stimulus to the economy.

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The footage from a Cleveland hotel security camera showed Hunt shoving and kicking a woman , with police ultimately responding. If no team claims him, he will enter free agency. "I made a bad decision at that time and I just hope that people forgive me".

Factually, Powell's remarks on Wednesday and in October are both true.

The Shanghai Composite Index rose 0.6 percent to 2,605.27 and Tokyo's Nikkei 225 advanced 0.9 percent to 22,378.46. However, it did signal a potential shift in tone about the pace of future rate hikes.

Trump's blunt public criticism of the Fed is without precedent.

On the economic front, USA real gross domestic product (GDP) increased at an annual rate of 3.5 percent in the third quarter, down from a 4.2 percent increase in the second quarter, according to a report released by the Commerce Department on Wednesday.

Powell's comments pushed USA stocks rocketed to their biggest gain in eight months. Powell and other Fed officials have since sounded a bit more cautious, nodding to a slowdown in Europe, Japan and China.

The contract's price was last up 4.5 basis points to the highest since early September and carried an implied yield of 2.70 percent.

Trump has repeatedly attacked Powell for continuing to raise the benchmark lending rate, which he says undermines the work he is doing to juice the USA economy.

Powell said the Fed is paying "very close" attention to economic data even as it expects continued "solid" growth, low unemployment and inflation near its 2-percent target. "Potential growth for supply is very limited and demand remains robust even though we've seen a decline in auto sales in China and a slowdown in vehicle sales in the USA", said Suki Cooper, precious metals analyst at Standard Chartered Bank.

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