Here's the key line from Powell investors latched onto: "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".
The dollar slipped from a two-week high on Wednesday after Powell said interest rates were just below neutral, raising expectations that the United States central bank was closer to the end of its rate-hike cycle. "In addition, the effect of a stronger dollar and weaker foreign economies on trade could affect the creditworthiness of US firms, particularly exporters and commodity producers".
Although a December rate hike has been widely expected, the Fed's path next year has been more uncertain, with investors last month expecting even three rate hikes in 2019.
He said: "We will be paying very close attention to what incoming economic and financial data are telling us".
On Wednesday, Mr. Powell pointed to the range of neutral-rate projections submitted by 15 Fed officials at their policy meeting in September, varying from 2.5% to 3.5%.
The US central bank warned, in its first report on vulnerabilities in the financial system, that escalating trade tensions with Beijing and other sources of geopolitical uncertainty could spark a decline in investor appetite for risk - a problem given the recent run-up in stocks and other assets. But after that, officials said further hikes would not be on a preset course. "This sounds like a more flexible approach to policy for 2019 than the impression created by the notion that the Fed has made a decision to lift the federal funds rate to neutral and that neutral was 3% or higher".
"If you look down the road, you see challenges ahead, and they're challenges that are typical in a cycle", said Powell speaking earlier this month at the Federal Reserve Bank of Dallas.
The rate hike likely coming on December 19 would raise the benchmark lending rate, which influences borrowing costs throughout the wider economy, to 2.5 per cent.
ANALYST'S COMMENT: The mix of Powell's and Lighthizer's comments indicate "it's far too early to suggest that a Santa Claus rally is in the cards", said Stephen Innes of currency trader OANDA in a report. "There's no question about that".
"The risks of destabilizing runs are far lower than the past", Fed Chairman Jerome Powell said in a speech Wednesday.
"What do you do?" said Powell in NY.
And Powell repeated the view that the current level - at 2.25% - is "just below" the estimate of neutral, a rate that neither stimulates nor restrains the economy. It slowly began to raise them again in 2015 as the economy regained strength under Obama, and it has raised rates six times since Trump took office.
Factually, Mr Powell's remarks on Wednesday and in October are both true. Those increases have raised its benchmark rate to a still-historically-low range of 2 per cent to 2.25 per cent.
The minutes did raise a number of worries about Trump's get-tough trade policies, which have levied tariffs on billions of dollars worth of imports from China and other countries and prompted retaliation against US products.