Price gains have consistently run beneath the Fed's 2% target, despite the U.S. central bank keeping its benchmark rates at relative lows in order to boost prices. The Fed is reviewing how to improve the structuring of its policies so that the 2% target is expected to be achieved by consumers and businesses.
"We're in the middle of thinking about ways of making that 2% inflation objective more credible," Powell told reporters at the Tuesday news conference.
Federal Reserve Chairman Jerome Powell has signaled that the U.S. central bank will likely forgo any future cuts to its benchmark rates, so long as economic growth and inflation matched the Fed's outlook.
Fed officials on Wednesday cut the federal funds rate — the interest charged on overnight loans among banks — for the third time this year to a range of 1.5% to 1.75%. The lower rates are designed to support economic growth because of a global slowdown, trade uncertainty and inflation running at low levels.
Powell said at a news conference Wednesday that it would take a "material reassessment" of the central bank's outlook for the economy for additional cuts to occur.
The Federal Reserve has cut its benchmark interest rate for the third time this year to try to sustain the economic expansion in the face of global threats. But it hinted that it won't cut again at its next meeting.
The Fed's move reduces the short-term rate it controls — which influences many consumer and business loan rates — to a range between 1.5% and 1.75%.
A statement the Fed released after its latest policy meeting removed a key phrase that it has used since June to indicate a future rate cut is likely. This could mean that Fed officials will prefer to leave rates alone while they assess how the economy fares in the months ahead.
The economy is in its 11th year of expansion, fueled by consumer spending and a solid if slightly weakened job market. But by cutting rates the Fed is trying to counter uncertainties heightened by President Donald Trump's trade conflicts, a weaker global economy and a decline in U.S. manufacturing.
The Federal Reserve is deciding whether to cut the short-term interest rate it controls for the third time this year, a decision they will announce at 2 p.m.
The Fed meeting comes after the government reported Wednesday morning that the economy grew at a 1.9% annual rate in the July-September quarter. That is a sign growth is slowing from last year, when it reached 2.9%.
The Fed's previous rate cuts in July and September have boosted home sales by lowering mortgage rates. Housing boosted growth in the third quarter for the first time in seven quarters.
Business spending, however, fell by the most in nearly four years. Many companies have said they have postponed major investment projects because of uncertainties stemming from the U.S.-China trade war.
Stock markets are mostly down as investors look ahead to an expected interest rate cut by the U.S. Federal Reserve.
Futures for both the Dow and the S&P 500 are down almost 0.1%, at 27,033 points and 3,034.75, while European indexes are mostly trading lower on Wednesday.
Britain's FTSE 100 is down 0.2% to 7,291, while Germany's DAX shed 0.2% to 12,910. Asian markets mostly closed lower, with Japan's Nikkei 225 losing 0.6% to 22,843.12.
The modest pullback came a day after the S&P 500 hit an all-time high.
Most investors expect the Fed to cut short-term interest rates by a quarter of a percentage point on Wednesday. It has cut rates twice since the summer to shield the U.S. from the impact of the trade war and a slowing global economy.
But Fed policymakers will likely refrain from signaling what its next move will be, preferring instead to keep its options open, economists say.
The Federal Reserve is set to cut its benchmark interest rate Wednesday for a third time this year to help sustain the U.S. economic expansion in the face of widespread trade tensions and slower global growth.
But the Fed's policymakers will likely frustrate anyone who is hoping for a clear signal about what they may do next. The central bank may prefer instead to keep its options open, economists say.
Analysts have forecast that the Fed will reduce the short-term rate it controls — which influences a broad range of consumer and business loans — by one-quarter percentage point year to a range of 1.5% to 1.75%. A third cut would nearly reverse the four rate hikes that the Fed made last year in response to a strengthening economy.