Speaking of the pace of rate hikes, Powell said the Fed "don't actually vote on a path or a plan for interest rates".
"Especially with inflation low and under control we have the ability to be patient and watch patiently and carefully as we. figure out which of these two narratives is going to be the story of 2019", Powell said when asked at the Economic Club of Washington about December forecasts from Fed policymakers showing they expect a median of two more rate hikes in 2019, after four previous year.
The U.S. central bank raised rates four times a year ago in the face of robust economic growth and unemployment that touched its lowest level in half a century.
The US economy is in good shape but could be pushed into recession if the central bank goes "too far" in raising interest rates, a senior Federal Reserve official said Wednesday.
Earlier: Jerome Powell has been moving markets - up and down - lately. In October, it rose 0.3 percent. Bloomberg's financial conditions index has retraced much of its December tightening.
Even so, USA central bankers face a challenging year that's complicating their communication.
He also warned the USA economy could take a clear hit from the government shutdown if it continued for a long time.More news: Vance Joseph could end up with the Jets as a defensive coordinator
Asked what qualifies for "normal", Powell said "I don't know the exact level."He noted that the balance sheet has declined to about $4 trillion, but that before the 2008 crisis it was below $1 trillion".
Mr. Clarida said monetary policy, after four rate increases previous year, isn't on "preset course".
While there is wide agreement that the US economy will grow more slowly than the roughly three percent rate of 2018, there's a lot of debate about how fast the slowdown will be.
"The principle worry I would have is really global growth", Powell said, but he added: "I still think the mostly likely baseline case for China is another year of solid growth".
While markets may be concerned about global trade tensions and slower growth overseas, Powell said there is no evidence of a USA recession on the horizon. The unemployment rate stands at 3.9 per cent and central bankers expect it to average 3.5 per cent in the final three months of this year.
The Fed chair, who has been publicly criticised repeatedly by President Donald Trump in recent months, warned that if there is an "extended shutdown", it would have an impact on the economy that "would show up in the data very clearly".
His biggest concern is weakening growth in China and Europe, although he warned a prolonged US government shutdown could become a drag on the economy.