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.
The comments appeared to be something of a reversal from remarks Powell made in a PBS interview in early October, when he said rates were "a long way" from neutral.
Matthew Cheslock, a trader at Virtu Financial, told CNNMoney editor-at-large Richard Quest on "Markets Now" Wednesday that the market interpreted Powell's comments as meaning that we are "closer to normal rates".
The Fed has raised rates three times this year and has been saying the economy is in strong shape.
Federal Reserve chairman Jerome Powell has opened the door for a potential pullback in projected United States interest rate hikes for 2019 following a widely expected increase in December. Next year, investors will hear from Powell after all 8 of the Fed's policy meetings, giving the markets even more chances to test their faith in the Fed chair.
Traditionally, stock markets love lower interest rates.
A few participants who agreed further rate increases were likely to be warranted also "expressed uncertainty about the timing" as Fed officials discussed how to communicate a possible change in their approach to any further hikes.
"Powell said nothing to suggest that he or the majority of the FOMC think they'll be able to stop at the bottom of the range, after just one more hike", said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
The Fed's current pattern of raising rates gradually - roughly once a quarter over the past two years - is an effort to balance two risks. President Donald Trump stepped up attacks on Powell for rate hikes Trump sees as undercutting his economic and trade policies, telling the Washington Post just yesterday that he is "not even a little bit happy" with the Fed chief. "There is a great deal to like about this outlook, " he said in a speech to the Economic Club of NY. Those increases have raised its benchmark rate to a still-historically-low range of 2 per cent to 2.25 per cent.
European markets meanwhile ended trading little changed, as investors diverted their attention to comments from Bank of England Governor, Mark Carney, along with Fed chairman, Jerome Powell.The Stoxx Europe 600 ended little changed at 357.39 and German DAX slipped 0.1% to close at 11,298.88.
Just on Tuesday, Fed Vice Chair Richard Clarida, in a speech to numerous same economists and investors in NY, used precisely the same language to describe the policy rate as "just below" the range for neutral. His remarks then led to an equity market sell-off as investors feared fast interest rate hike pace would slow down the economy.
But keeping rates "too low for too long" could create other risks, including accelerating inflation, he said.
But Powell's most recent words should be taken along with other recent remarks in which he showed concern for the global economic outlook.
Trump directly criticized Powell, whom he appointed as Fed chairman. But some economists say three rate increases for next year are beginning to look less certain.