The minutes and Powell's comments did have one thing in common, they both signaled a December interest rate hike.
The chairman also suggested that interest rates appear to be just below the level the Fed calls "neutral", where they are thought to neither stimulate growth nor impede it. He also noted that the economy had yet to feel the full impact of the hikes.
In its report, the Fed warned that markets and financial firms will need to continue to adjust to plans for future rate hikes after years of low interest rates following the financial crisis. But that doesn't mean rates won't rise further, as most officials said another rate increase was likely, perhaps as soon as next month. The law creating the Fed says such officials can be "removed for cause".
"You're no longer on a forced march to neutrality, " he said. "Not even a little bit".
The benchmark rate, now at 2 to 2.25 per cent, is within a quarter of a percentage point of the bottom of the Fed's range for neutral, but is also several quarter-point rate hikes below the mid-point estimate of 3 per cent.
While the speech had "cleaned up after Powell's sloppy language last month", markets may have reacted too strongly to the comments, said Ed Al-Hussainy, senior rates analyst at Columbia Threadneedle Investments. Commodity-producing and emerging countries led gains among currencies as traders bet the greenback may be close to its peak.
The Fed has raised interest rates steadily under Powell's leadership as the central bank has tried to balance promoting maximum employment with controlling inflation.
"The unemployment rate is 3.7 percent-a 49 year low, and many other measures of labor market strength are at or near historic bests", he said.
The stock market rallied on the speech, going up more than 400 points, or 1.75%.
Referring to the Fed's gradual increases in its benchmark rate, Powell said, "there is 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.
USA government bond prices were mixed following the Fed chair's speech.
Economists and investors have been scratching their heads this week over signals from the Federal Reserve, which left the future of USA 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. And they dumped stocks in response.
Gregory Daco, chief USA economist at Oxford Economics, said Wednesday that, "I think we should refrain from an overly dovish interpretation" of Powell's comments. Rather, we assume that Powell wanted to prepare the markets for a change in the central bank's communication.
The minutes said that such a change would help to convey "the Committee's flexible approach in responding to changing economic circumstances", while market supposed that this could indicate possible changes for the Fed's rate hike decisions in 2019.
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