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Nov. 28, 2018 / 5:20 PM GMT
By Erik Sherman
The Dow Jones Industrial Average spiked by over 550 points on Wednesday as traders responded to comments from Federal Reserve Chairman Jerome “Jay” Powell in his first speech since President Donald Trump blamed him for the recent stock market sell-off.
In prepared remarks for a speech at the Economic Club of New York, Powell said there is no “pre-set policy path” for interest rates, and focused his remarks on an economy that is “growing above trend.”
“Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy — that is, neither speeding up nor slowing down growth,” Powell said.
His comments marked a change in outlook from those made just two months ago, which precipitated a correction by the S&P 500 index.
“Powell blinked,” tweeted Jim Cramer, host of CNBC’s Mad Money. “They did more homework. They recognized the economy peaked in October and they don’t want to put us at the end of the cycle.”
While the Fed is structured to be largely insulated from politics — and politicians largely have respected the organization and its officials in the past — Powell has faced an unprecedented amount of backlash from Trump.
In an interview with The Washington Post published on Tuesday, Trump rounded on his choice for Fed chairman, blaming Powell for recent stock market declines and also for this week’s announcement by General Motors that it is laying off 15 percent of its workforce and closing five plants.
“So far, I’m not even a