The report also said household borrowing is in line with household income, and that insurers have strengthened their financial position and money market funds are less vulnerable than prior to the recession of a decade ago.
Because of the optimistic report and no mention of potential interest rate increases in Powell's address, the Dow Jones Industrial Average rose over 400 points in midday trading on Wednesday.
"He said the magic words", Gregori Volokhine of Meeschaert Financial Services told AFP.
However, central bankers have never signaled they intend to stop raising rates once they hit neutral - which is a moving target and subject to debate. Trump has complained that the Fed is threatening to undo the economic stimulus being provided by the tax cuts and that its rate hikes are unnecessary because inflation has remained relatively low.
"There is no preset policy path" in interest rate hikes, Powell said, noting that the Federal Open Market Committee, which sets rates, will make policy decisions based on developing conditions and not through a predetermined plan.
Cautious remarks from Fed Chair Jerome Powell created fresh doubt about the pace of rate hikes from the US Federal Reserve next year, seeing US bond yields slide and leaving the US dollar sharply lower.
The chairman of the US Federal Reserve gave a shot in the arm to Wall Street and cooled a conflict with President Trump yesterday by indicating that interest rates may not rise as quickly as expected. In an interview with the Washington Post this week Trump said he was "not even a little bit happy" with his selection for Fed chair.
The comments were a reversal from early last month, when Powell had said rates were probably still a "long way" from a so-called neutral level and that the Fed may even go beyond that level.
Cleveland Cavaliers trade Kyle Korver to Utah Jazz
The Cleveland Cavaliers have traded shooting guard Kyle Korver to the Utah Jazz , according to Adrian Wojnarowski of ESPN . Korver is averaging 6.8 points in 15.7 minutes per game, both his lowest figures since his rookie season in 2003-04.
With the DUP opposed, UK PM May's working majority is minus 7
She added: "We shouldn't just accept an outcome for the sake of it - we should try to get a deal that is good for everybody". The Prime Minister used to say that.
Top LeT operative, who killed Kashmir journalist Bukhari, gunned down in encounter
Meanwhile, mobile internet services in Budgam and Pulwama districts have been suspended as precautionary measure. He was also involved in attacks on security establishments and "many other civilian atrocities", police said.
While Powell said Fed officials are monitoring these risks, they are not on the whole too anxious about them.
But in response to questions he likened the policy process to walking through a dark room, forcing officials to slow down.
Investors cheered the dovish turn, sending the Dow up more than 600 points - just the kind of market pop that Mr. Trump likes to point to as evidence his policies are working. His predecessors in the White House took care not to directly or publicly attack the central bank's rate policy.
The US Dollar basket (DXY) dipped lower but remains in a strong uptrend, underpinned by interest rate expectations.
For his part, Bianco also said anxiety aside, old sources of risk ー like the banking system, the credit markets, the mortgage markets, or too much leverage ー won't cause the next financial crisis.
"My own assessment is that, while risks are above normal in some areas and below normal in others, overall financial stability vulnerabilities are at a moderate level", Powell said. "For now, 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".
It said Britain risks suffering an even bigger hit to its economy than during the global financial crisis 10 years ago if it leaves the European Union in a worst-case Brexit scenario.