The S&P 500 Index fell 0.4 per cent as of 11:34 a.m. "My [Federal Open Market Committee] colleagues and I, as well as many private-sector economists, are forecasting continued solid growth, low unemployment, and inflation remaining near 2 percent".
Powell's remarks saw the USA dollar slump against all major currencies, especially those in emerging markets as well as the Australian and New Zealand dollars.
In his speech, Mr Powell said he viewed gradual increases as the best way to balance the risks of causing problems by raising rates too fast or too slowly.
In a speech Tuesday, Vice Chairman Richard Clarida suggested that the Fed would continue to strive to be "data dependent" by using the latest readings on the economy "with a healthy dose of judgment and humility" to determine its interest-rate policy.
Trump has repeatedly attacked Powell for continuing to raise the benchmark lending rate, which Trump says undermines the work he is doing to juice the United States economy.
Finally, turn up the heat under that mixture by denouncing your central bank and making veiled threats at its boss for raising interest rates to keep a lid on the inflationary forces that you're eagerly stoking.
Powell's comments appear to implicitly reject arguments from President Trump that past interest rate increases have been a mistake.
Recent remarks by Powell and other officials have made investors more hopeful that the Fed might raise interest rates at a slower pace next year.
Trump's blunt public criticism of the Fed is without precedent.
Federal Reserve Chairman Jerome Powell addresses the Federal Reserve Board's 15th annual College Fed Challenge Finals in Washington, Thursday, Nov. 29, 2018.
The neutral level for interest rates is the point where they don't add or detract to economic activity. The higher the interest rate, the greater the cost to pay off credit.
The Fed has already raised a key interest rate three times this year and is expected to raise the rate again next month.
Despite Trump's tough remarks on the trade dispute ahead of Saturday's meeting with Chinese President Xi Jinping, markets focused on comments by White House economic adviser Larry Kudlow, who indicated the two countries could call a truce. This softer language indicates the Fed will likely raise rates in December. That's the Fed's job, and it was long before Mr. Powell took the reins.
Powell did not address the process of so-called quantitative tightening, concentrating instead on financial stability and its importance. Investors had been anxious that too many rate hikes at too fast a pace would raise the cost of borrowing across the board, from mortgages to vehicle loans.
He also said the central bank does not see "dangerous excesses" in stock markets and the financial system now is "substantially more resilient" than it was before the 2008 financial crisis.
Mr Powell said the overall risks to financial stability remain "moderate", but he flagged rising levels of corporate debt as one area of concern.
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