Powell said that "there is no preset policy path" for future rate hikes and the current level for the Fed's benchmark rate was very close to "neutral", the point where the Fed is neither stimulating economic growth or slowing growth. That contrasted with a remark Powell made in October that the Fed's policy rate was still a "long way from neutral". That sets the ideal environment for the Fed to continue its slow increase of borrowing rates.
Stocks and interest-rate futures jumped, even while economists wrestled to interpret whether Powell meant to send a message or was simply misunderstood. "We still expect the Fed to hike rates twice in the first half of next year, before a slowdown in economic growth to below potential forces it to the side lines", Paul Ashworth, chief USA economist at Capital Economics, wrote in a note.
On Wednesday, Mr Powell also emphasised these uncertainties.
Prior to Powell's comments, market watchers believed that 2019 would see the same gradual rate hikes from the Federal Reserve that 2018 experienced.
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There might be fewer interest rate hikes in 2019.
The Fed has so far raised interest rates three times this year, most recently in September, taking its key policy rate, the Fed Funds rate, to a range of 2-2.25%. By contrast, Japan's Nikkei Stock Average rose for a sixth straight session, gaining 0.4% to close out November with a almost 2% gain.
Powell "gave the market, and presumably President Trump, exactly what he wanted, which was an admission that the previously proposed path of future rate hikes was probably too aggressive and opening to slowing the rate of hikes", said Oliver Pursche, vice chairman and chief market strategist at Bruderman Asset Management in NY. I'm doing deals and I'm not being accommodated by the Fed.
The Dow Jones Industrial Average jumped over 617 points, or 2.5 percent, registering the best three-day gain since 2016, with the addition of 111.22 points, or 4.22%, according to the Dow Jones Market Data Group.
And, when presidents do criticise the Fed, they only tend to do it once they have left office. "But I think they are overpriced", he said. Critics have expressed worry that the president's attacks threaten the Fed's ability to operate free of political pressure. The US federal funds rate range is now 2.0 - 2.5 per cent.