ATLANTA — Federal Reserve Chairman Jerome H. Powell sought to calm worried investors on Friday, casting the United States economy as strong but promising to adjust monetary policy quickly if global growth slows under the burden of an ongoing trade war.
“I think the markets are pricing in downside risks, is what they’re doing,” Mr. Powell said at a panel discussion at an annual meeting of economists here. “They’re well ahead of the data.” But, he added, “We’re listening carefully to that. We’re listening sensitively to the messages markets are sending.”
The Fed, which has raised rates for five consecutive quarters, has penciled in an additional two rate hikes for 2019. That has sent markets swooning, as many analysts and economists fret that the Fed could snuff out the economic expansion. Mr. Powell, acknowledging those concerns, said the Fed would be prepared to adjust if economic conditions warrant.
“We’re always prepared to shift,” Mr. Powell said, adding the Fed could shift “significantly” if necessary.
Mr. Powell began his remarks by noting several indicators of strength in the economy, including Friday’s report that the United States added more than 300,000 jobs in December, well above expectations. But he acknowledged weakness in a recent survey of manufacturing activity, as well as concerns about growth in China and around the world, particularly related to trade tensions between America and the Chinese.
The Fed chair also noted that if economic conditions weaken, the Fed could readjust its plan to shrink the extraordinary amount of support it has provided to financial markets in the decade since the financial crisis.
“We wouldn’t hesitate to make a change” in policy, he said.
[U.S. employers added 312,000 jobs last month, capping a year of robust hiring.]
Mr. Powell called 2018 “a good year for the United States economy” and said that economic data suggest “ongoing momentum heading into 2019.” He welcomed the increased growth in wages, reported in Friday’s jobs report, and said that it “does not raise concerns about too-high inflation” — a signal to markets that the report is unlikely to accelerate plans for interest rate hikes.
He also said that Fed officials would be “patient” as they watch economic developments play out this year.
Under questioning by Neil Irwin, an economics writer at The New York Times, Mr. Powell did not rule out meeting with President Trump, who has sharply criticized the chairman and his rate decisions over the past year.
Mr. Powell said no such meeting has been scheduled, but noted that presidents and Fed chairs have met face-to-face in the past.
Asked if he would resign if Mr. Trump asked him to, Mr. Powell replied simply, “no.”
Mr. Powell went out of his way to reassure Americans that the Fed remains an independent body that would not be affected by pressure from the White House.
“People should know that the Fed has a very strong culture around nonpolitical activity,” he said. “I want the public to be assured that we have a strong culture, it’s not a fragile one, it’s not being disrupted”