Dow up 600 points as Fed chief says interest rates near neutral

Goldman Sachs Group Inc. recommends an outright long gold position into next year

Goldman Sachs Group Inc. recommends an outright long gold position into next year

The November jobs report is due out Friday.

While he acknowledged the growing concern over increased borrowing by businesses that already carried a high debt load, he said for now they were "unlikely to pose a threat to the safety and soundness" of the system in the event of a downturn. But Bush's complaint about the Fed occurred years after he had left office.

Powell's speech came a day after US President Donald Trump's latest attack on the US central bank. The December CPI will be low and even negative and the rate of annual inflation will reach the lower range of the price stability target set by the government, which will signal a wait until the next rate hikes. Trump has threatened to launch a third round of tariffs on $267 billion in Chinese goods if he and Xi fail to end their impasse.

And he said the financial system was now "substantially more resilient" than it was before the 2008 financial crisis.

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After Powell's speech, stocks immediately soared, with the Dow surging 617 points to close at 25366.43. And Narendra Modi, the Indian prime minister, has recently launched a series of attacks on the Reserve Bank of India for raising interest rates too quickly. "From a financial stability perspective; however, today we do not see risky excesses in the stock market". He has repeatedly bashed Powell, a Republican investment banker he appointed and described a year ago as a "wise steward".

However, being just below neutral doesn't necessarily mean that the Fed is nearing its limit in terms of hiking rates as the range for neutrality can vary. However, some analysts view the post-Powell speech rally as a byproduct of overexuberance-something that is not out of the ordinary.

"I'm doing deals, and I'm not being accommodated by the Fed", Trump said in the interview.

"They're making a mistake because I have a gut and my gut tells me more sometimes than anybody else's brain can ever tell me", the president added.

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The US central bank has been on a hiking path, raising the US benchmark rate about once every three months. It followed several weeks of market volatility that some investors had blamed on uncertainty over the Fed's intentions, among other things.

Speaking in the wake of another volatile market sell-off, the Fed chairman offered few clues on how much longer the central bank would continue tightening policy but he did say the policy rate, at 2-2.25pc, is now "just below" the broad range of estimates of neutral, which in September.

The Australian dollar lifted sharply to 73.1 U.S. cents at 8:05am (AEDT) - due to the greenback falling 1.2 per cent.

Markets are now trying to divine Powell's plans from data pulling in two directions - rising wages that could be a precursor to inflation, for example, compared to slowing growth and falling oil prices that may keep inflation down, or other indicators clouding the picture.

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And on Wednesday evening, just as Mr Carney was being questioned about the stability report, Mr Powell appeared to be delicately walking away from a gun the U.S. president had pointed at his head.

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