Powell's press conference Wednesday following the rate-hike announcement led to more risk aversion in financial markets, as he voiced confidence that the economy would likely remain strong enough in the year ahead to require additional rate increases.
Earlier this week, the Federal Reserve hiked its target range for benchmark interest rates to 2.25 percent to 2.5 percent. Given that @realDonaldTrump has been silent on the matter, we can not rule out a rage stroke felling the leader of the free world, and before he got a chance to read the good news. In my opinion, by proceeding with yesterday's rate hike and suggesting that two more are on the way for 2019, the odds that there will be no rate hikes in 2019 have increased. "I think the Fed has gone insane", the president said in October.
"Not to sound naive or anything, but I believe President Xi meant every word of what he said at our long and hopefully historic meeting", Trump tweeted.
With the Fed signaling "some further gradual" rate hikes and no break from cutting its massive bond portfolio, United States stocks and bond yields fell hard.
"He thinks his legacy is going to be the guy who rebuilt and revived the US economy".
On Thursday, Japan kept its policy settings unchanged, as expected.
First Trump declared himself a "Tariff Man", promising to inflict as much economic pain as possible - a move that horrified investors.
The Fed also made a widely expected technical adjustment, raising the rate it pays on banks' excess reserves by just 20 basis points to give it better control over the policy rate and keep it within the targeted range.
Powell acknowledged the shift in the Fed's strategy.
His overall message was reinforced later on Friday by Cleveland Fed chief Loretta Mester, who also voted for the rate hike.
"After today's action, the target range for the federal funds rate is 2.25 per cent to 2.5 per cent, putting it at the lower end of the range of estimates of the longer run normal rate provided by the committee", he said Wednesday.
"The market volatility is being driven by computer algorithm trading programs that instantly buy or sell everything, depending on the news they are getting fed".
In the morning, the Dow had jumped almost 400 points after Williams told CNBC that the Fed would pay close attention to the economy as it considered raising rates in the future.
However, there are fears that conditions could turn tougher next year as the fiscal boost from Mr Trump's spending and tax cut package fades and the global economy slows. Its statement described the economy as strong.
In its updated outlook, the Fed lowered its forecast for growth next year to 2.3 per cent from the 2.5 per cent it foresaw three months ago.
BlueScope Steel and South32 shed 2.33 and 1.81 per cent respectively, while Fortescue Metals fell 0.36 per cent to $4.115. But it arguably nicked the Fed's credibility as policymakers were continually forced to downgrade their outlook year by year.
The economy has been adding jobs at a pace that will continue bringing the unemployment rate down over time, he said. From China to Europe, major economies are weakening. And continuing trade tensions between the US and China have led to growing fears about the outlook for the global economy. It would likely cause massive amounts of panic within the markets, and would be met by heavy challenges from those on both sides of the aisle. And as US interest rates have risen, loan-sensitive sectors of the economy, from housing to autos, have begun to weaken.
It is also removing stimulus by reducing its portfolio of Treasuries and mortgage-backed securities, which were purchased in response to the financial crisis. This process is thought to have had the effect of putting further upward pressure on borrowing rates for consumers and businesses.