The only time Powell appeared to make reference to the extra pressure exerted by the Trump presidency was when he cautioned against a presumption that a September rate cut was set in stone.
He said: “Monetary policy is not on a preset course”.
Members of the policy making committee would take the decision “based solely on their assessment of the data and its implications for the economic outlook and the balance of risks.
“We will never deviate from that approach,” he said.
Friday’s speech is likely to be Powell’s final address to the annual gathering of the country’s central bankers in Jackson Hole, as his term comes to an end in May 2026.
He was appointed chairman of the Federal Reserve by Trump in 2017.
Since then however Trump has expressed increasing animosity, hurling personal insults at the central banker, including calling him a “numbskull” and a “stubborn moron”, because he did not support the president’s calls for rapid, large cuts to borrowing rates.
Trump has also publicly raised the idea of removing Powell from his post early, although it is not clear that he has the legal authority to do so.
Earlier this week the president called for another of the Fed’s officials, Lisa Cook, to resign, over alleged mortgage fraud. She said she would not be “bullied” into leaving.
Investors welcomed Powell’s speech, pushing the main American share indexes sharply higher in the minutes after he began speaking. By the end of the day’s trading in the US, the broad S&P 500 index was around 1.5% higher.
Brian Jacobsen, chief economist at Annex Wealth Management, said the Fed had opted against being the “party-pooper”.
“Chair Powell has shown he has an open mind to reading the data tea leaves,” he said.
Diane Swonk, chief economist at KPMG US said: “Powell opened the door a little wider to a cut in rates in September.”
But she said the Fed clearly remained concerned about the risk of rising prices.
“There is more caution than the markets are giving him credit for,” she said.
Capital Economics’ deputy chief North America economist, Stephen Brown, said that while a September rate cut now looked “almost nailed on”, higher job creation or “much more concerning” price data in August could still trigger a delay.