The general consensus is that a rate hike in December will most certainly occur as the CME Group's FedWatch Tool, an algorithm that calculates the probability of a rate hike in a given month, is now showing an 82.7% chance the Federal Reserve will institute a fourth rate hike to end 2018.
"The health of the economy gradually but steadily improved, and about three years ago the [Fed] judged that the interests of households and businesses, of savers and borrowers, were no longer best served by such extraordinarily low rates", he said.
Until now, strong economic data and new fiscal stimulus made the central bank more determined to gradually lift rates to neutral because the economy is expanding solidly and unemployment continues to fall.
He said then that growth overseas was likely to weaken and that United States fiscal stimulus, which had goosed consumption, would soon fade.
That "just below" phrasing seemed to indicate that the Fed is almost done raising rates for the time being.
Trump has tended to lash out at the central bank whenever there is volatility in the stock market, a phenomenon that is sometimes but not always related to the Fed.
Fed officials appeared less concerned about a market selloff that led to a rotten October for stocks.
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Powell also revealed the economic growth coincides with inflation, and the Fed's annual goal of 2 percent interest rate increases.
"The messaging from the US over the last four weeks has been characteristically erratic", said David Page, senior economist at AXA Investment Managers.
Nearly all Fed officials at the meeting agreed another interest rate increase was "likely to be warranted fairly soon", but also opened debate on when to pause further hikes and how to relay those plans to the public. That suggested to many investors that fewer rate increases might be on the way.
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", he added. His emphasis on Wednesday suggested greater flexibility to stop sooner or move more slowly.
Markets are now trying to divine Powell's plans from data pulling in two directions - rising wages that could be a precursor to inflation, for example, compared to slowing growth and falling oil prices that may keep inflation down, or other indicators clouding the picture. But that approach is no longer appropriate, Powell said. "Not even a little bit". Home sales, vehicle sales, business investment and other parts of the economy that are sensitive to interest rates have begun to soften, evidence that the Fed's eight rate increases since 2015 are changing household and business behaviour. "And I'm not blaming anybody, but I'm just telling you I think that the Fed is way off-base with what they're doing".
October's Wall Street sell-off and a rise in bond yields tightened financial conditions while some sectors most sensitive to interest rates, such as the housing sector, had already begun to slow.
Neither Clarida nor Powell said definitively whether rate hikes should stop at neutral, and each stressed that level was very hard to estimate. At that time, Fed policymakers indicated another hike in December, three more in 2019 and probably one more in 2020.