Mr 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", Oliver Pursche, vice chairman and chief market strategist at Bruderman Asset Management, told Reuters.
Analysts think a rate hike next month is likely, but economists admit three rate increases for next year are beginning to look less certain, especially if stock market volatility increases, and consumer and business sentiment worsens in early 2019.
After several years of steadily raising interest rates, Federal Reserve officials discussed this month a more flexible policy of setting rates.
The Fed has raised rates three times this year and says the current economy is in strong shape.
"We also know that the economic effect of our gradual rate increases are uncertain, and may take a year or more to be fully realized", Powell said in NY.
Federal Reserve Chairman Jerome Powell says he's pleased with the state of the US economy but cautions that some forms of corporate debt have reached risky levels.
Minutes of the United States central bank's November 7-8 meeting showed "almost all participants" agreed that another rate hike would likely be necessary "fairly soon".
And Powell's words stood in stark contrast to his remarks of a month earlier, when he said rates were still "a long way" from neutral, perhaps suggesting the Fed actually had a lot more tightening to do.
The minutes of the Fed's November 7-8 meeting showed 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.More news: Microsoft Office has pretty new icons but they have a fatal flaw
More news: 'Six and a half minutes of terror' before Mars landing
More news: How the New York Public Library Engages Readers With Instagram Stories
Although a December rate hike has been widely expected, the Fed's path next year has been more uncertain, with investors last month expecting two or even three rate hikes in 2019.
Just on Tuesday, Fed Vice Chair Richard Clarida, in a speech to numerous same economists and investors in NY, used precisely the same language to describe the policy rate as "just below" the range for neutral.
On Tuesday the president told the Washington Post blames the Fed for recent declines in the stock market and General Motors' plans to close two plants in the US.
"Powell is not suggesting that since they are just below the range they may stop soon". The US federal funds rate range is now 2.0-2.5 per cent.
The Fed said that nearly all of its policymakers agreed that "a gradual approach to policy normalization remained appropriate" in its newly released minutes of the Federal Open Market Committee (FOMC) meeting which was held from November 7 to November 8.
The Fed is still likely to raise rates in December. "The market is putting too much weigh on the dovish arguments here; I don't think that is what he meant to signal".
But keeping rates "too low for too long" could create other risks, including accelerating inflation, he said.
"What do you do?" said Powell in NY.
After the financial crisis erupted in 2008, the Fed kept rates at historically low levels to revive the ailing economy. Fed forecasts from September showed policymakers expected to raise rates a bit above 3 percent by around 2020, according to the median.
"There is a great deal to like about this outlook", Powell said Wednesday.