Fed will review how it conducts policy next year

The goal is to "extend the recovery, expansion, and to keep unemployment low, to keep inflation low".

While generally upbeat about the US economic outlook, Powell listed potential challenges including slowing demand overseas, fading fiscal stimulus and the lagged effect on the economy of the Fed's eight rate increases since late 2015.

Chairman of the U.S. Federal Reserve Jerome Powell said that he is very happy about the current state of the American economy. We don't try to control things we don't control.

"But we also know that trade needs to be both free and fair", he said.

But he also cautioned that every time the Federal Open Market Committee meets from now on, there's the possibility of additional - but gradual - short-term interest rate hikes. The central bank's rate increases are starting to bind on some segments of the economy such as housing, and financial conditions are tightening. And while he said he regarded financial risks overall as "pretty moderate", with neither banks nor households heavily leveraged, he said corporate borrowing had caught the Fed's attention. "He opted to try to calm the markets, at least from the Fed's side".

The US expanded at a 3.5 per cent annual pace in the third quarter on the back of strong consumer spending with unemployment at the lowest level since 1969.

That comment may have been a quiet rebuke to President Trump, who's openly criticized Powell for raising interest rates, which he said hinders economic growth.

"We are absolutely committed to serving the public in a non-partisan, professional way, in a way that communicates what we're doing and why we're doing it as clearly as possible" Powell said.

"Slowing growth overseas. The tax cuts and spending increases that were enacted are providing some real boost right now, but that impetus is going to wear off over time", Powell said when asked to list the "headwinds" the economy may face in coming months.

Powell acknowledged signs that global growth might be slowing, but played down concerns about volatility in equity markets, describing stock prices as "one of many factors" the Fed evaluates in making policy decisions.

That did not alter the Fed's outlook much, and policymakers at their meeting last week said economic growth continued "at a strong rate". Measuring 7 by 10 foot, against a verdant background we see a fully clothed man, said to be his one-time lover, watching another swimming towards him in a pool. He "is trying to be nimble as the data come in".

"The markets definitely got in the habit of having us only move on press conference meetings", Mr Powell said.

At another point, he was asked about the old Wall Street adage that bull markets don't die of old age but rather get killed by the Federal Reserve.