Early Friday, the Labor Department said that USA employers added the most workers in 10 months as wage gains accelerated and labor-force participation jumped, suggesting the underlying economy is holding up amid falling stock prices. "Can we wait?" Mester said. "Powell is definitely trying to calm the markets".
Taken together, Mester said, those are the sorts of developments one would expect in an economy where interest rates were near a neutral level that was neither encouraging nor holding back economic activity.
Wall Street stocks surged higher on Friday (Jan 4) to finish a volatile week on an upbeat note following dovish Federal Reserve comments and a strong U.S. jobs report.
Stocks surged on Friday after the Labor Department reported US firms created 312,000 jobs in December, and Powell said the Fed would be flexible in deciding on any further rate increases.
The S&P 500 Index jumped 3.4 per cent on Friday in response, though the stock gauge is still off about 14 per cent from its September peak.
The Fed chief stressed that the economy remained on track and that the job market was quite strong. That could lead to renewed turbulence as the Fed and other central banks seek to normalise monetary policy at a time of cross currents in the global economy.
Trump has complained that the Fed has pushed rates higher despite the fact that there is no evidence that inflation was getting out of control.
The head of the Fed, once confirmed by the Senate, can only be removed "for cause", not a policy disagreement.
"Nothing's been scheduled, I would say that meetings between presidents and Fed chairs do happen", he told moderator and New York Times reporter Neil Irwin. He also said that he would not resign if asked to do so by U.S. President Donald Trump.
The Fed chief said the markets are "well ahead of the data" in the United States and are pricing in downside risks, particularly internationally.
On Friday, Powell said, "We are always prepared to shift the stance of policy and to shift it significantly if necessary" to meet the goals of maximum employment and stable prices.
Her comments, from a sometimes hawkish Fed official, highlighted the change in tone at a central bank that, after two years of roughly quarterly rate increases, was now assessing the risks of going too far.
At the conference on Friday, Mr Powell said he has not spoken directly to Mr Trump and would not resign if asked.
Analysts predicted that job reports for January and February will be more of a policy reference for the Fed than the December report as they would provide a clearer picture of how tightened financial conditions affect the US economy.