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He also noted that the economy had yet to feel the full impact of the hikes.

Minutes of the November 7-8 meeting of the Fed's rate-setting body, the Federal Open Markets Committee, show that officials expressed concerns about a variety of threats, including the impact of tariffs, a slowing global economy and tightening financial conditions amid falling stock prices. That could fall to two when officials update those forecasts at their Dec 18-19 meeting, Wrightson ICAP chief economist Lou Crandall said.

Joblessness stood at 3.7% in October, well below the rate the Fed sees as sustainable in the longer run. "You slow down. You maybe go a little less quickly".

Gold may be poised to rally as speculation mounts that the Federal Reserve will hit the pause button on interest rate hikes in 2019. Commodity-producing and emerging countries led gains among currencies as traders bet the greenback may be close to its peak.

Next month's expected quarter-point increase would lift the central bank's target for the federal funds rate to a range of 2.25 per cent to 2.5 per cent. Since then, he and other Fed officials have sounded a bit more cautious, nodding to a slowdown in Europe, Japan and China.

"There is a great deal to like about this outlook", said Powell on Wednesday.

But he cautioned that things could turn out a lot differently than the Fed expects.

"We also know that the economic effects of our gradual rate increases are uncertain and may take a year or more to be fully realised", he said, adding that there was "no preset policy path".

Economists are divided about what the Fed will do beyond December. Oxford Economics now predicts a single increase in 2019 while JP Morgan and Goldman Sachs see four. Three of those increases have been under Powell. Minutes the next day, which covered the Fed's last meeting, signaled policy makers will adopt a more flexible approach in 2019.

The possible policy shift occurred at a meeting at which the Fed also resumed debate on how best to manage short-term interest rates in the future, a decision that could influence the final target size of the Fed's still-massive balance sheet.

"A couple of participants noted that the federal funds rate might now be near its neutral level and that further increases in the federal funds rate could unduly slow the expansion of economic activity and put downward pressure on inflation and inflation expectations", said the minutes. "The market viewed this as a dovish development".

Economists and investors have been scratching their heads this week over signals from the Federal Reserve, which left the future of U.S. monetary policy open to broadly divergent interpretations.

Powell unnerved investors on October 3 when he said in an unscripted comment that Fed policy probably was "a long way from neutral" and might eventually have to turn restrictive.

Though Mr Powell's comments were markedly different from his characterisation of Fed policy last month, he left ample room for the central bank to continue raising rates, depending on the economy's performance. And they dumped stocks in response.

The Fed has raised rates three times this year and says the current economy is in strong shape.

Trump has repeatedly attacked Powell over rate increases, calling the investment banker he selected a year ago to oversee the world's most powerful central bank a "threat".