Powell says he would reject any Trump request to resign

A street sign Wall Street is seen outside New York Stock Exchange in New York City New York

U.S. Federal Reserve Chairman Jerome Powell on Friday signaled patience in the central bank's policy contemplation for this year despite a higher-than-expected job growth data released on the same day.

The Fed raised its benchmark interest rate four times in 2018, with the latest announced on December 19, when Powell said his institution's policy decisions are "not on a preset course".

Trump picked Powell to head the Fed in February. The blue-chip Dow Jones Industrial Average finished at 23433.16, up 746.94 or +3.05% and the tech-based NASDAQ Composite closed at 6738.86, up 275.36 or +3.79%.

Wall Street, which opened sharply higher after a report showing 312,000 jobs gained in December, surged even higher during Powell's appearance. The figures strengthened the case of those who have argued that markets have overreacted to signs that United States growth may have peaked.

Immediately after Powell's comments stocks began surging.

He also defended the Fed's rate rises, pointing to strong economic data that suggest businesses and households can handle the higher costs.

"A solid set of job numbers and some comfortable words from the chairman of the Federal Reserve have been just the ticket to get markets into bullish mode", said Chris Beauchamp, chief market analyst at online trading platform IG.

Powell called the jobs report "very strong", with USA data "on track to sustain good momentum into the new year".

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"No one knows whether this year will be like 2016", Powell said in remarks that appeared to be scripted at the start of the event.

That's enough to make Powell's colleague in Texas, Dallas Fed President Robert Kaplan, argue for putting rate increases on hold for the first couple of quarters of 2019.

He added that, if needed, "we are always prepared to shift the stance of policy and to shift it significantly".

Although still low by historical standards, this latest hike put interest rates at the highest level in almost a decade.

Trade uncertainty and concerns about global growth seem to be an important factor in the recent US weakness: tariff worries have surfaced repeatedly in Fed surveys.

Since mid-December, investors have been expressing disagreement with Powell's assessment of the economy, saying the Fed had it all wrong and that the economy was weakening. It marked the ninth time the Fed has raised interest rates since 2015. "Some years ago, we decided that rate policy was going to be the active policy tool and the balance sheet would be allowed to shrink gradually and predictably in the background", he said.

"Nothing's been scheduled, I would say that meetings between presidents and Fed chairs do happen", he told moderator and New York Times reporter Neil Irwin.

In response to the observation that the Treasury issues more securities when the Fed's balance sheet holdings mature, Powell said, "We don't believe our issuance is an important part of the story in the market turbulence that began in the fourth quarter of previous year".

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