On Friday, Jerome Powell, the chairman of the US Federal Reserve, took steps to reassure the financial markets. He said that that the US central bank would be “patient” regarding rate increases.
He also emphasised his independence, has said he will not step down from his position even if he is asked to by Donald Trump, the President of the United States of America.
CNBC reported that during the annual meeting of the American Economic Association, he was asked whether he would step down if he was asked by President Trump. Powell reportedly answered “no.”
President Trump appointed Powell, however, the US President has become increasingly critical of the monetary policy of the Fed and its decision to increase rates four times in 2018.
Last month, Bloomberg reported that Trump talked about firing Powell in December, because of his frustration with an interest rate increase and the losses in the stock market.
During the same event, Ben Bernanke, a former Fed chairman, said that the approach of President Trump to the Federal Reserve is problematic.
According to CNBC, Bernanke stated: “I think everyone would be better off if it was clear that the Fed is making its decision based on its mandate and on its assessment of long-term needs in the economy which I’m completely confident that it will do.”
Powell said that he has not been contacted by the White House over the monetary policy of the Fed and no meeting with President Trump had been scheduled.
Both the Dow and S&P 500 closed more than 3 percent higher. The Nasdaq rose by nearly 4.3 percent.
The gains were also driven by strong job creation data. It reversed the sharp declines from a day earlier, extending the recent rollercoaster ride experienced in the markets.
The investors have grown nervous in the past months. They are partly worried about the moves by the Federal Reserve to raise the interest rates, despite thr signs of a global growth slowdown.