Fed chair Jerome Powell to speak on market concerns Thursday

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"Especially with inflation low and under control we have the ability to be patient and watch patiently and carefully as we. figure out which of these two narratives is going to be the story of 2019", Powell said when asked at the Economic Club of Washington about December forecasts from Fed policymakers showing they expect a median of two more rate hikes in 2019, after four previous year.

"If we have an extended shutdown, I do think that would show up in the data pretty clearly", Powell said. Echoing remarks by Chairman Jerome Powell earlier in the day, Clarida said the Fed can afford to be patient in determining its monetary stance.

"I don't see anything that suggests the possibility of a recession in the near term is at all elevated", he said.

"I'm very anxious about it", the Fed chief told participants of The Economic Club of Washington, DC on Thursday. He said the Fed's aim was to return the balance sheet to a "more normal level" but didn't specify what that level will be.

Clarida is the latest US central banker to refine the Fed's monetary message after the hawkish tone of their December 19 statement and forecasts for further rate hikes in 2019 roiled financial markets.

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Moving ahead, today's United States economic docket, highlighting the release of the latest USA consumer inflation figures, will influence the Dollars price dynamics and produce some meaningful trading opportunities later during the early North-American session. The principal worry is global growth, he said in questioning by David Rubenstein, the co-founder of private-equity firm Carlyle Group, where Powell was previously a partner.

The head of the Federal Reserve also warned that while his department has no official projection on the current government shutdown, it can still have a damaging effect on the national economy.

President Donald Trump has been a vocal critic of Powell. Those forecasts appear supported by a robust December labor-market report, which showed the economy added 312,000 non-farm jobs, the most in 10 months.

While there is wide agreement that the USA economy will grow more slowly than the roughly 3 per cent rate of 2018, there's a lot of debate about how fast the slowdown will be. "The US economy is solid".

While those initial comments boosted stocks, they later slipped when Powell said the Fed would shed significantly more assets than it already has. Financial markets are incorporating a variety of risks to the outlook, ranging from slowing global growth to the potential for a protracted trade war with China.

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