Powell delivered the guidance in a highly anticipated speech on Friday at the central bank's annual symposium in Jackson Hole, WY.

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.