Powell says Fed will be ‘patient’ with monetary policy in 2019

Federal Reserve Chair Jerome Powell said on Friday that policymakers at the U.S. central bank are closely watching the economy and markets for signs of a global growth downturn to determine when -- or if -- they’ll hike the benchmark federal funds rate in 2019.

“Markets are expressing concerns, again about global growth in particular,” he said during a joint interview, along with former Fed Chairs Janet Yellen and Ben Bernanke in Atlanta. “I think that’s becoming the main focus, and trade negotiations, which are related to that. And I’ll just say, we’re listening carefully to that. We’re listening sensitively to the message that markets are sending.”

Powell seemingly acknowledged that, despite strong economic data, investors are anxious after Wall Street’s rocky December, which saw the Dow Jones Industrial Average and S&P 500 post their worst performances since the Great Depression (however, that same month, the U.S. economy added 312,000 jobs – almost double the number that analysts were anticipating – pushing the markets higher on Friday).

“We’ve been willing to revisit our views, very much willing to revisit our views, of what the natural rate is, and also our understanding of what it is,” Powell said.

In mid-December, the Federal Open Market Committee voted to raise interest rates for the fourth and final time in 2018, even as President Trump urged them to “feel the markets.”

At the time, Powell said there was a “fairly high degree of uncertainty” about the future of further rate hikes, but not that rates have effectively arrived at the lower-end range of neutral.

Although still low by historical standards, this latest hike put interest rates at the highest level in nearly a decade. It marked the ninth time the Fed has raised interest rates since 2015.