Powell could tackle key issues in high-profile speech Friday

Powell could tackle key issues in high-profile speech Friday

The dollar weakened as Powell, speaking in Jackson Hole, Wyoming, said a gradual approach of raising rates remains appropriate to protect the USA economy and job growth, despite President Donald Trump's criticism of higher borrowing costs.

"We can afford to wait and see and inflation does start to move up, well, we can move up", he added.

Part of Powell's rationale for raising rates is that with unemployment at 3.9 percent, inflation will not stay low forever, so rates need to rise somewhat.

The president previously upbraided Powell and the Fed via Twitter for raising rates while the economy is humming along.

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The Dow Jones Industrial Average rose 133.37 points, or 0.52 percent, to 25,790.35, the S&P 500 gained 17.71 points, or 0.62 percent, to 2,874.69 and the Nasdaq Composite added 67.52 points, or 0.86 percent, to 7,945.98.

Despite the risks from trade disputes, George said in her interview that she believes the economy is performing strongly and regards further Fed rate hikes as justified. "The Australian economy is okay regardless of who is prime minister", said Yamamoto.

"While Powell prefers to speak plainly and in non-technical terms, he may find reason to take a more guarded approach in order to avoid the appearance of open conflict with the administration". In June, most Fed officials projected the natural rate of unemployment was between 4.1% and 4.7%. "It's easier for them to do their job if they're given independence and they don't have people harping at them politically". The economy is strong and the Fed must walk a tight line between not snuffing out growth and not allowing an overheated economy to produce runaway inflation. The president has complained that the Fed's tightening of credit could threaten the continued strong growth he aims to achieve through the tax cuts enacted late a year ago, a pullback of regulations and a rewriting of trade deals to better serve the United States.

He said there is also much uncertainty over the "neutral" rate of inflation - the point at which the Fed's policy rate is neither stimulating economic growth nor holding it back.

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A Grand Teton National Park officer stands watch Friday outside the room where the Jackson Hole Economic Policy Symposium was taking place at Jackson.

Though Powell chose not to mention Trump's criticism, other Fed officials asserted that the president's complaints about rate hikes would have no effect on their policymaking.

The Fed has raised its key policy rate seven times since late 2015 after seven years of keeping the rate at a record low near zero to help the economy recovery from the Great Recession. The bank made a total of seven rate hikes since December 2015, three coming past year.

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