Traders of fed funds futures extended slightly the amount of easing they expect from the USA central bank this year after Powell's remarks.
The chair, under pressure from President Donald Trump to cut rates soon and deeply, listed a series of economic and geopolitical risks that the Fed is monitoring - many of them, Powell noted, linked to the administration's trade war with China and other countries.
Trump said in a subsequent Twitter post that he would respond to China's tariffs later on Friday.
The Fed cut the benchmark interest rate last month for the first time in more than a decade, partly as insurance against the impact of trade uncertainties on the economy.
The topic of Powell's speech is "Challenges for Monetary Policy" - an understatement given the stakes.
FOMC participants said they still viewed a sustained US economic expansion, strong labor markets and inflation near the target "as the most likely outcomes".
Powell, in a highly anticipated speech Friday morning at the Fed's annual conference in Jackson Hole, Wyo., pledged to do whatever the Fed could to sustain USA economic growth.
Futures were little changed in Japan and Hong Kong.
"We are carefully watching developments as we assess their implications for the USA outlook and the path of monetary policy", he said.
Powell has said that the White House criticism has had no effect on the Fed's deliberations over interest rate policy.
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"My only question is, who is our bigger enemy, Jay Powel or Chairman Xi?" Fed officials say tariffs and trade tension are causing businesses to put off spending.
He did note that rate cuts in the 1990s had helped to keep an expansion intact. "You need to do something about trade". USA benchmark Treasury yields fell to their lowest level in a week and the dollar declined broadly.
Investors have fully priced in another quarter point reduction when the Federal Open Market Committee meets on September 17-18, according to federal funds futures contracts.
There was even a difference of opinion among the Fed members who favored a rate cut, the minutes showed, with some concerned most about subpar inflation and others anxious more about the threats to economic growth.
Earlier on Friday, St. Louis Federal Reserve Bank President James Bullard told Bloomberg TV the policy-setting Federal Open Market Committee would have a "robust debate" about cutting USA interest rates by a half percentage point at its next policy meeting in September.
However, when rates are too low, they can spur unsustainable growth and fuel rising inflation.
He said he is "not interested" in testing the theory "that this time is different" with regard to interpreting the bond market's signal.
He said that if the trade wars have disrupted business investment and confidence and contributed to "deteriorating" global growth, the Fed could not set all that right through monetary policy. "But, I am very attuned to the downside risks to this economy".
And, of course, there is Trump.
Speaking at the conference in Jackson Hole, Wyoming, Powell indicated but did not confirm that the Fed would further cut interest rates in the coming months.