USA stock futures were also down, with E-Minis for the S&P 500 giving up 0.1 percent. "We think the Fed is unlikely to raise interest rates again this cycle", said Andrew Hunter, senior United States economist at Capital Economics in London.
Patrick McHenry, the ranking Republican on the House Financial Services Committee, asked the chairman during a hearing Wednesday to respond to claims that there is a "Powell Put, " meaning the Fed will change the course of interest rates in response to volatility - in effect underwriting risk-taking.
Forecasting that the USA economy would expand at a much slower pace in 2019, Fed Chair polished the USA lawmakers, "We view current economic conditions as healthy and the economic outlook as favorable".
Powell is referring to the central bank's holdings of about $3.8 trillion in bonds, which it has steadily been reducing since October 2017.
Powell said the Federal Open Market Committee, the Fed's policy-making body, "can now evaluate the appropriate timing and approach for the end of balance sheet runoff".
"We're close to agreeing on a plan which would light then way to the end of the process", Powell said Wednesday. While the USA economy remains "solid", he said, risks have increased of late and growth is expected to slow in 2019 versus a year ago.
Money markets have priced in as much, ruling out rate hikes for the remainder of the year, with an 80 percent probability of a rate cut by January 2020.
"We are not looking at a higher inflation target, full stop", Powell said.
"While we view current economic conditions as healthy and the economic outlook as favourable, over the past few months we have seen some crosscurrents and conflicting signals", Powell said, adding that the central bank is monitoring how Brexit negotiations and Sino-U.S. trade talks play out.
He cited the financial markets becoming more volatile toward year-end, financial conditions proven less supportive of growth than they were earlier past year, as well as slowing growth in some major economies.
Powell's comments came in response to a question from Rep. Al Green, D-Texas, who noted that President Donald Trump had attacked the Fed's interest rate decisions repeatedly past year.
Other longer-run challenges range from relatively stagnant incomes for many families and a lack of upward economic mobility among people with lower incomes, to a "widely agreed" fact that the federal government debt is on an unsustainable path, the central bank chief said.