"My colleagues and I", the Fed chairman said in his speech, "are carefully monitoring incoming data, and we are setting policy to do what monetary policy can do to support continued growth, a strong labour market, and inflation near two per cent".
The Fed, which began to tighten monetary policy in 2015, has raised rates twice this year and is widely expected to do so again next month and in December. Leaving rates too low for too long runs the risk of creating a bubble in the stock market and causing the economy to overheat, which could trigger a recession.
However, he noted the USA economy remained strong and anyone who wanted a job could find one, while prices were rising at about the Fed's target pace of 2%.
The Fed is very confident in the US economy and Powell indicated there is no intention of slowing down the Fed's rate hikes, said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina.
Although George noted that "expressions of angst" from the White House when there are higher interest rates is not necessarily unique to the Trump administration, she said the Fed will ultimately remain faithful to preserving the value of the US dollar.
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However, the investors would again scale back the Fed rate hike expectations, sending the United States dollars lower across the board if Fed's Powell, during his speech at Jackson Hole later today, stresses more on the negatives laid out in the minutes. Yields on the 10-year Treasury note were initially lifted before settling back to levels prior to his remarks.
Powell devoted his speech Friday to defending the Fed's actions against critics - both those who, like Trump, say the Fed is raising rates too quickly and those who say the Fed is moving too slowly.
Powell noted that the economy remained strong and anyone who wanted a job could find one.
With Powell sticking to his guns, "the news won't be welcomed by president Donald Trump", said Andrew Hunter, US economist at the consultancy Capital Economics. "If the strong growth in income and jobs continues, further gradual increases in the target range for the federal funds rate will likely be appropriate". JPY= It was 0.4 percent lower to the euro at $1.15830.
"Chief Powell also sees no signs of inflation moving above the Fed's target, while he stressed that he will do "whatever it takes" in case inflations expectations drift".
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But Powell sounded bullish on the economic expansion.
Powell said the uncertainty about how low unemployment could go without triggering rampant inflation called for an approach focused on risk-management.
The Fed chairman discussed risk-management strategy at a time when the economy's structure is changing and uncertain.
"The FOMC has been navigating between the shoals of overheating and premature tightening with only a hazy view of what seem to be shifting navigational guides", he said.
Fed officials see near-term risks coming from White House policies, minutes from their July 31-Aug. 1 meeting show. An escalating trade war could put a dent in hiring and investment, while fiscal stimulus could accelerate growth further at a time when the economy is already running hot. The president has complained that the Fed's tightening of credit could threaten the continued strong growth he aims to achieve through the tax cuts enacted late a year ago, a pullback of regulations and a rewriting of trade deals to better serve the United States. "Inflation is near our 2 percent objective, and most people who want a job are finding one".
Fed interest rate hikes appear on course after chair Jay Powell's address
An inverted yield curve in the past has pointed to a recession will occur within two years. MSCI's broadest index of Asia-Pacific shares outside Japan.MIAPJ0000PUS shed 0.25 percent.