USA stock markets jumped following the comments, as investors interpreted them to mean the central bank was close to the end of its tightening cycle, which has seen eight rate increases since December 2015 following the global financial crisis.
In his speech, Powell noted that interest rates remain "just below" the so-called neutral range, the level that central bankers believe will neither accelerate nor halt economic growth.
Traditionally, stock markets love lower interest rates.
But Powell's comments are prompting speculation among many investors that a looser policy may lie ahead.
When interest rates are neutral, the economy is on a sustainable path. Deviations from neutrality can cause booms and busts. Recep Tayyip Erdogan, the Turkish president, has recently put pressure on the Turkish Central Bank to hold down interest rates - something the bank, to its credit, refused to do.
On Wednesday Powell said the Fed is paying "very close" attention to economic data even as it expects continued "solid" growth, low unemployment and inflation near its 2 percent target.
Dollar weakens as cautious Fed leads to rate-hike rethink
Tom Porcelli of RBC Capital Markets said investors were wrong to interpret Mr Powell's words as "dovish". 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".
The chance of four increases, to a target range of at least 3%-3.25% by the end of 2019 implied by the Fed's dots, is given just an 8.6% probability, down from the already low 18.6% probability a month ago, according to the CME Fed Watch site.
He said then that growth overseas was likely to weaken and that U.S. fiscal stimulus, which had goosed consumption, would soon fade.
But Wednesday's report stopped short of drawing "a bottom line conclusion" - a point Powell reiterated in his remarks, adding that the semiannual survey should be viewed as a routine checkup.
The need for "further gradual rate increases" as appropriate to keep the current recovery on track has been a staple of recent Fed policy statements as the central bank nudged rates back toward more normal levels after a decade near zero.
"The neutral rate is an absurd concept".
While the speech had "cleaned up after Powell's sloppy language last month", markets may have reacted too strongly to the comments, said Ed Al-Hussainy, senior rates analyst at Columbia Threadneedle Investments.
In the week ahead, the Fed will see one of the last big economic statistics before its next interest rate decision. In the past when reporters have raised the issue of the president's complaints, Powell has said they would have no effect on the Fed's rate policy.