While acknowledging that the Fed's "baseline outlook is for economic growth to remain solid", Powell spent much of the time during the hearing explaining the risks facing the USA economy.
The labor market remains healthy despite the rising risks to the 10-year old economic expansion, the longest in history.
The only question left seems to be: How low will borrowing costs go this month?
US futures pointed to a stronger opening for Wall Street as well with E-Minis for the S&P500 at 0.2%.
Traders boosted the amount of easing they expect from the Federal Reserve this year following testimony from Chairman Jerome Powell in which he said downside risks to the economy are lingering. The Fed had justified its four rate hikes in 2018 in part by arguing that robust hiring would eventually ignite inflation.
As tame US inflation continues to worry, the Labor department's June consumer price index (CPI) data will be closely watched.
The Fed's dual mission, to get unemployment as low as possible while keeping prices steady, balances two forces that have historically worked against each other. But the Fed has reasons to worry when inflation stays consistently below its target level. "Even on the more dovish side of the spectrum, the voices have been lukewarm".
Powell used an appearance https://www.federalreserve.gov/newsevents/testimony/powell20190710a.htm before his congressional overseers on Wednesday to confirm that the US economy is still under threat from disappointing factory activity, tame inflation and a simmering trade war.
Earlier rounds of US tariffs on trading partners including China had been dismissed by the Fed as of little macroeconomic importance, with central bankers in early May still anticipating the policy rate would remain unchanged for the rest of the year.
Powell also cited European and Asian economic data as continuing "to disappoint" and weighing on USA growth, the head of the US central bank said.
ASB senior economist Mark Smith also picked annual inflation to "tick up" to 1.7%, and core inflation measures were expected to be clustered around, or slightly below, 2% year on year. It increased 1.6% year-on-year in June, slowing from May's 1.8% rise.
He said: 'The law gives me a four-year term and I fully intend to serve it'.
There is one area where the president, the chairman and most modern economists agree: The fear of high inflation is a thing of the past. Globalization has enabled the production of many goods in low-wage countries, thereby lowering costs. "For central banks like the Federal Reserve or European Central Bank, there is too much global reliance on the stability of asset prices in order to dramatically surprise market participants".
White House counselor Kellyanne Conway told reporters Tuesday that Mr. Trump has made clear his unhappiness with the Fed's rate policies and believes "he has the power to fire Jay Powell, but he hasn't done that".
Higher inflation does offer some benefits.
Stocks notched fresh highs - with the S&P briefly topping 3,000 for the first time ever - after the Fed signaled it's poised to cut interest rates for the first time in more than a decade, citing worries over trade tensions and growth. That's because lower interest rates would likely lead more and more investors to abandon low-yielding bonds and seek higher returns in stocks. But that dynamic has not fully kicked in during the current expansion and inflation has been stuck below the Fed's 2 percent target almost the entire seven years since the Fed settled on that figure, according to a separate measure the Fed prefers.