The Trump administration has pressured Powell, whose term as Fed chair expires next year, to step down as chair of the central bank.

Minutes after the speech, investors pegged the chances of a quarter-point interest rate cut at 91%, up from a 75% chance assessed one day earlier, according to CME FedWatch Tool, a measure of market sentiment. Despite the market's positive reaction to Powell's speech, the Fed chair voiced a note of caution for the outlook for the U.S. economy.

Federal Reserve Chair Jerome Powell has been under pressure from President Trump to lower the central bank's benchmark interest rate.