The US Federal Reserve doesn’t see any asset price bubble and thinks that interest rates are “just below” neutral, Fed chair Jerome Powell signaled in a speech on Wednesday

In plain English, that means the Fed won’t hike interest rates much further and wants to see asset prices remain buoyant. Equity markets responded by jumping.

The dollar also fell on the news which will likely benefit emerging market equities markets, especially in Asia.

In a speech to the New York Economic Club today, Powell said: “Looking across the landscape of major asset classes, we see some classes for which valuations seem high relative to history.

But, he added, “we see no major asset class, however, where valuations appear far in excess of standard benchmarks as some did, for example, in the late 1990s dot-com boom or the pre-crisis credit boom.”

Riskier assets, he noted, “are in the upper ends of their post-crisis distributions, although they are short of the levels they hit in the pre-crisis credit boom.”

He also said, “Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy‑‑that is, neither speeding up nor slowing down growth.”

That’s as close to an about-face and double-time walk-back as the US central bank has ever undertaken absent a major financial crisis. It’s also a personal victory for President Trump, who blamed Fed interest rate action for recent weakness in the stock market.

The dollar’s sharp decline following Powell’s remarks is good news for emerging markets.

Higher US rates, a rising dollar and a risk-off mood in capital markets suck money out of higher-risk investments. Asian equities should be the biggest beneficiaries, although the whole spectrum of emerging markets should benefit.