"If you look down the road, you see challenges ahead, and they're challenges that are typical in a cycle", said Powell speaking earlier this month at the Federal Reserve Bank of Dallas.
"I am pleased to say that our economy is now close to both of those objectives", Powell said in an appearance at the Economic Club of NY.
In a speech to the Economic Club of New York, Mr Powell said: "Interest 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 - that is, neither speeding up nor slowing down growth".
"Powell took pains to state that the FOMC's rate projections are based on their best assessments of the economic outlook", Kevin Logan, chief USA economist for HSBC wrote in a Wednesday note to clients, referring to the policy-setting Federal Open Market Committee.
Currently, the Federal Open Market Committee forecasts three quarter-point hikes for next year after a December increase, which is virtually guaranteed.
Stocks swooned as investors bet the USA central bank would need more rate hikes to prevent the economy from overheating.
Nevertheless, it is a tricky concept: Economists put the range between 2.5 per cent and 3.5 per cent.
But Powell said: "my view is that such losses are unlikely to pose a threat to the safety and soundness of the institutions at the core of the system and, instead, are likely to fall on investors in vehicles like collateralized loan obligations with stable funding that present little threat of damaging fire sales".
"His description highlights the significant uncertainty around estimates of neutral, a theme he mentioned at his speech at Jackson Hole in August", Jan Hatzius, chief United States economist for Goldman Sachs, wrote in a note to clients Wednesday. His remarks Wednesday appeared to suggest to this audience that he might stop sooner or move more slowly. "All he is doing is pointing out an obvious idea", Porcelli wrote in a client note.
"Over the past year, firms with high leverage and interest burdens have been increasing their debt loads the most", Mr. Powell said.
He said then that growth overseas was likely to weaken and that U.S. fiscal stimulus, which had goosed consumption, would soon fade.
"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.
"Many participants indicated that it might be appropriate at some upcoming meetings to begin to transition to statement language that placed greater emphasis on the evaluation of incoming data in assessing the economic and policy outlook", said the minutes.
For his part, Trump has sought repeatedly to shift blame for any economic troubles to the Fed and its rate increases. While interest rates were gradually moving to a neutral point, "we're a long way from neutral at this point, probably".
We expect an interest rate hike in December and three more in 2019.
"If there has been one certainty of late it is the market's ability to misinterpret Fed Chairman Powell".
October inflation figures published yesterday showed upward price pressures right at the Fed's two per cent target while consumers continued to spend at a brisk pace.
Trump's blunt public criticism of the Fed is without precedent.