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Powell: Fed "Will Be Patient" With Rate Hikes As Economy Evolves

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Strong jobs data released earlier in the day helped offset recent concerns about the U.S. economy, although Federal Reserve Chairman Jerome Powell noted Friday the central bank "will be patient" with monetary policy as it watches the economy evolve.

Powell stressed that monetary policy is not on a "preset path" after the Fed raised interest rates four times in 2018 and forecast two rate hikes in the new year.

"Particularly with muted inflation readings that we've seen coming in, we will be patient as we watch to see how the economy evolves," Powell said.

The Fed chief said the central bank is always prepared to significantly shift the stance of monetary policy if incoming economic data does not meet expectations.

Powell's comments came as part of a joint discussion with former Fed Chairs Janet Yellen and Ben Bernanke at the American Economic Association and Allied Social Science Association annual meeting in Atlanta.

The current Fed Chairman also said he would not resign if asked to do so by President Donald Trump, who has repeatedly criticized the central bank for raising interest rates.

Powell said he had not received any direct communication from the White House and that no meeting with Trump has been scheduled.

Asked about Trump's approach to the Fed, Bernanke suggested "everyone would be better off if it was clear that the Fed is making its decision based on its mandate and on its assessment of long-term needs in the economy."

Powell also noted the Fed "wouldn't hesitate" to make a change to its balance sheet normalization plan if it is causing problems for the financial markets.

"We don't believe that our issuance is an important part of the story of the market turbulence that began in the fourth quarter of last year," Powell said. "But, I'll say again, if we reached a different conclusion, we wouldn't hesitate to make a change."

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