After briefly spooking markets briefly with an optimistic readout of how awesome the economy is, Fed Chair Jay Powell gave stocks just what they wanted, when in a stark depature from his December FOMC speech, the Fed chair said that Fed policy can change and is "prepared to adjust policy quickly and flexibly" while adding that "there is no preset path for policy", confirmed that the Fed is "listening carefully to market."
More importantly, Powell also said that the Fed would adjust the balance-sheet normalization policy "if needed" and if it becomes an issue for the market and economy: "We said that we would be prepared to adjust our normalization plans" and this would include the balance sheet.
That said, Powell also noted that “markets are pricing in downside risks" even as he sees no major risks in the economy.
And in an amusing tangent, Powell also said that he would not resign if Trump asked him to.
This is a distinctly different tone for Powell's communication style - clearly signaling he got the message from markets that his hawkish pre-position perspective on halting asset bubbles is utterly useless once you get the role of Fed Chair - and stocks are soaring as the market welcome this "new" Powell who appears far more sympathetic to the pain being felt in risky assets.
And that helped send US equity markets back into the green for 2019.