FEDERAL RESERVE/NOMINATIONS/TRUMP AS PRESIDENT: “Jerome Powell spent his first day as chairman of the Federal Reserve sizing up the largest stock selloff in 6½ years and the largest one-day point decline on record for the Dow Jones Industrial Average.
The Fed was an indirect player in the recent market tumult. A Friday [2-2-18] report of strong January wage gains prompted investor worries that rising inflation would force the central bank to raise interest rates more aggressively than previously anticipated. Markets had been remarkably placid before last week and with similarly low volatility in currency and bond markets. The Fed raised its short-term benchmark interest rate three times last year to a range between 1.25% and 1.5% as the economy strengthened and stocks climbed.
Mr. Powell and his colleagues made no public comment on the selloff Monday and are unlikely to make any sudden moves that could further amplify market volatility. The Fed is a glacial institution that doesn’t plot rapid changes in course, and he has signaled continuity with the go-slow approach of his predecessor, Janet Yellen.
The stock drop could serve as a healthy correction of asset values that Fed officials have characterized as elevated for several months. This would allow the Fed to stick with its plans to raise interest rates three times this year.”
-Nick Timiraos, “Market Turmoil Greets New Federal Reserve Chairman,” The Wall Street Journal online, Feb. 5, 2018 07:29pm