Stocks rise on Fed’s interest-rate stance

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Stocks rise on Fed’s interest-rate stance

Published Date: 2019-01-07 | Source: Stephen Gunnion | Author: Stephen Gunnion

Stocks rise on Fed’s interest-rate stance

The chair of the US Federal Reserve said its interest-rate policy remained flexible and dependent on economic conditions.

US stocks rallied on Friday, signalling a better week ahead for global equities after the chair of the US Federal Reserve softened his stance on interest-rate hikes this year.

In a panel discussion at a conference of the American Economic Association, Jerome Powell indicated that the Fed would be "patient" and flexible with its rate-hiking policy if economic conditions weren't suitable. That saw the US benchmark S&P 500 stock index closed 3.4% higher after a volatile week for the market after Apple revised its first-quarter sales forecast downwards due to lower iPhone sales in China. The tech-heavy Nasdaq market jumped 4.3% on Friday, with Apple up 4.3% too.

Powell also confirmed the Fed's political independence following criticism from President Donald Trump for raising interest rates last month.

While there had been speculation that the Fed could cut rates this year, employment data released on Friday indicated that the US economy remained strong. The much-watched non-farm payrolls report showed 312,000 jobs were created last month against expectations of 177,000. However, the unemployment rate increased to 3.9% as more people entered the workforce. Wages rose 3.2% year-on-year, the fastest since 2009.

The JSE closed 1% higher on Friday. Powell's remarks were made after the close of trade.





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