What's moving markets today
1:30 pm: Toward the end of his talk, Powell sought to emphasize the Fed is willing to change its plans -- if needed.
"We're very flexible in adapting our policy if the economy moves, as it often does, in ways we don't expect," he said.
1:14 pm: Powell isn't buying into that 2019 recession talk.
“I don’t see anything that suggests the possibility of a recession in the near term is at all elevated,” he said.
Why? Powell said recent recessions have been caused by the Fed having to “hit the brakes” to combat high inflation or “asset bubbles.” Right now, the Fed doesn’t see evidence of either.
“I don’t see a recession,” Powell said.
However, the Fed chief is less bullish on the world economy. “The US economy is solid. There is good momentum going into this year. The principal worry is global growth,” he said.
1:08 pm: Here's more evidence of Wall Street's focus on the Fed's balance sheet: Powell reiterated that the Fed wants to have its balance sheet "return to a more normal level."
Asked what qualifies for "normal," Powell said "I don't know the exact level."He noted that the balance sheet has declined to about $4 trillion, but that before the 2008 crisis it was below $1 trillion.
"It will be substantially smaller than it is now," Powell said.
Stocks turned negative after the comments, with the Dow recently down about 35 points.
1:05 pm: Powell is sounding cautious about the impact of a prolonged government shutdown.
“If we have an extended shutdown, I do think that would show up in the data pretty clearly,” Powell said.
But he noted that the economic data would also be muddied because the shutdown is impacting the Commerce Department, which operates the Bureau of Economic Analysis and the Census Bureau. Reports like retail sales and GDP could be sidelined.
“We would have a less clear picture into the economy if it were to go on much longer,” Powell said.
12:56 pm: Asked if he's bothered by President Donald Trump's attacks on the Fed, Powell said "no."
"We do not take political factors into consideration in our discussions or decisions at all."
Powell seemed open to, though not enthusiastic, about a potential meeting with Trump.
"I’m not aware of any Fed chair turning down an invitation from the White House, nor do I think that would be appropriate," Powell said.
But when Rubenstein asked if he'd be happy to accept an invitation, Powell simply repeated: "I'm not aware of anyone not accepting it."
12:48 pm: Powell describes the labor market as "very strong," but acknowledges the market turmoil.
"Financial markets are expressing a view of concern about downside risks associated with global growth and with trade," Powell said.
Asked if the Fed still plans two rate hikes, Powell emphasized there is not on a set course.
"We're in a place where we can be patient and flexible," he said. "We're waiting and watching."
Earlier: Jerome Powell has been moving markets – up and down – lately. The Fed chief will be in focus again this afternoon as he fields questions at the Economic Club of Washington.
Powell is scheduled to be interviewed soon by David Rubenstein, the billionaire co-founder of the Carlyle Group.
Soothing words from Powell on interest rates and the Fed’s balance sheet helped propel markets last Friday. That amounted to a redo for Powell, whose comments during a December 19 press conference deepened fear on Wall Street.
Which Powell will show up on Thursday? Stay tuned for live updates.
BlackRock (BLK), the world’s largest asset manager, plans to lay off 500 employees globally, or 3% of its workforce.
President Rob Kapito detailed the cuts in an internal memo seen by CNN Business.
"As our industry undergoes an era of significant change, we can continue to outperform by building our business in high-growth markets," he said in the note sent this morning. "But executing on this strategy requires that we move decisively to refocus resources where the impact will be greatest."
Even after the cuts, Kapito said BlackRock’s headcount will be 4% higher compared to a year ago. The company will report its earnings from the final three months of 2018 next week.
Markets have bounced back from an early selloff:
Now the question is how markets will react to Fed chief Jerome Powell's 12 p.m. ET speech.
Shares of Target (TGT) are down nearly 4%, after it reported strong sales figures for the holiday shopping season.
Sales soared 5.7% for the past holiday season — an increase of more than 2% compared to the same period in 2017. Online sales surged 29% compared to last year.
But some analysts are speculating that the free two-day shipping with no minimum purchase that Target offered over the holidays will hurt its profit margins.
Even our Paul R. La Monica isn't totally sure why the stock is falling:
Other retailers are also down: Shares of Macy's, Kohl's and Nordstrom are all falling.
CNN's Julia Chatterley and Anna Stewart discuss how Brexit and China factor into an auto sales slump.
The recovery in the stock market is running into a bit of resistance.
Thursday’s early slide was mostly driven by poor earnings and guidance from major companies and waning optimism about US-China trade talks. US oil prices were also lower after eight straight days of gains.
The Fed chair has been high profile in public lately. He's speaking again today at the Economic Club of Washington, DC. It's at noon and we'll stream it live.
Meanwhile, don't miss this analysis from CNN Business' Matt Egan on the Fed's delicate unwinding of its crisis-era balance sheet.
Many market watchers believe that the balance sheet shrinkage — it's down $500 billion from the peak — has at a minimum contributed to turbulence in financial markets, Matt writes.
Once the Fed started quantitative tightening, the global stock market tipped over right on schedule," legendary investor Jeff Gundlach said on Tuesday during a webcast. "There is an eerie correlation."
Bed Bath & Beyond surged 10% in pre-market trading today.
The company reported quarterly earnings late last night that beat Wall Street’s low expectations. Although comparable store sales fell 1.8% during the quarter compared to the same period last year, Bed Bath & Beyond raised its guidance for this year. That encouraged investors.
Bed Bath & Beyond (BBBY) had a rough 2018. Its stock has fallen more than 40% in the last year as people buy more home furnishings at Amazon (AMZN) and Walmart (WMT). Bed Bath & Beyond is trying to fight the perception that its merchandise is too expensive compared to Amazon. The company is also trying to develop more of its own brands, and it is closing stores to reduce costs.
American Airlines stock fell 7% in premarket trading after the company lowered its outlook for revenue in the fourth quarter.
Airlines are being helped by lower-than-expected fuel prices. But that wasn’t enough to satisfy investors who are worried about warning signs of a slowing economy, especially overseas.