"We are in a place where we can be patient and flexible and see what does evolve", Powell said.
The central bank's vice chairman, Richard Clarida, said later on Thursday that if the global slowdown and tightening of financial markets persists, the Fed would take policy steps to offset that.
Moving ahead, today's U.S. economic docket, highlighting the release of the latest USA consumer inflation figures, will influence the United States dollars price dynamics and produce some meaningful trading opportunities later during the early North-American session.
In contrast, his remarks in his three previous appearances since late November moved stocks an average of 2.4 per cent in either direction, and his comments last Friday spurred the largest market reaction yet to any of his 17 public appearances since taking office last February.
Asked if the Fed still plans two rate hikes, Powell emphasized there is not on a set course. Those forecasts appear supported by a robust December labor-market report, which showed the economy added 312,000 non-farm jobs, the most in 10 months. "The U.S. economy is solid".
Powell on Thursday also reiterated that, separate from what happens with interest rates, the Fed would continue allowing its almost US$4 trillion portfolio of bonds to shrink each month, to a level "substantially smaller" than it is now.
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The Fed raised rates for a fourth time in 2018 at its December meeting and signaled that it would raise rates another two times in 2019.
Still, Powell's comments and those of other officials "are developing a new narrative".
Powell also said he didn't see signs of a recession in the near term, but noted that his "principal worry" was a slowdown in global growth and that while the United States economy appears "solid", a slowdown in China "is a concern".
He agreed with the prevailing view of the USA economy slowing to around 2.25-2.5 per cent this year, with unemployment holding around the current 3.9 per cent. However, many economists believe the Fed may end up raising rates only once in 2019, and that solo rate hike may not occur until the middle of the year. If conditions weaken, the Fed would react. "The principal worry we have is global growth" in Asia, Europe and elsewhere.
The Fed chair, who has been publicly criticised repeatedly by President Donald Trump in recent months, warned that if there is an "extended shutdown", it would have an impact on the economy that "would show up in the data very clearly".
JPMorgan Chase has estimated that the partial government shutdown - which is 20 days old Thursday - is shaving $US1.5 billion off the economy each week, a modest amount in the context of a $US20 trillion economy, the damage will keep growing.