Fed officials ponder the yield curve signal

So far this year the rupee has weakened 8.9% while foreign investors have sold $493.40 million and $5.57 billion in equity and debt markets respectively

"Congress understood this tension might exist between a central bank, which is responsible for the money supply, and those that have other angles in the economy", she said.

The dollar weakened as Mr Powell, speaking at a meeting of global central bankers in Jackson Hole, Wyoming, said a gradual approach of raising rates remains appropriate to protect the United States economy and keep job growth as strong as possible with inflation under control.

"If the strong growth in income and jobs continues, further gradual increases in the target range for the federal funds rate will likely be appropriate", Powell said in a speech at the Fed summit in Jackson Hole, Wyo. On Thursday, two top Fed officials made clear Thursday that Trump's criticism won't affect their decisions on whether to continue raising rates.

However, he noted the U.S. economy remained strong and anyone who wanted a job could find one, while prices were rising at about the Fed's target pace of 2%. Most market participants had expected the central bank to raise rates again in September and December.

"It looks like he understands the light touch he has to have on raising rates versus inflation", Kim Forrest, senior portfolio manager at Fort Pitt Capital Group LLC in Pittsburgh, said by phone.

The Fed is very confident in the USA economy and Mr Powell indicated there is no intention of slowing down the Fed's rate hikes, said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina.

Powell devoted his speech Friday to defending the Fed's actions against critics - both those who, like Trump, say the Fed is raising rates too quickly and those who say the Fed is moving too slowly.

Questioning Fed actions is normally off limits for U.S. politicians, since it could raise fears central bankers would feel political pressure and fail to act to head off rising inflation.

The Fed has been coming to Jackson Hole since 1981.

But if Powell strikes a message of concern, it could be read as a sign that the Fed is considering slowing its hikes. "It has to be the bearer of bad news during good times and tighten in order to avoid sharp upticks in inflation", he said.

The Fed chief has addressed the issue of central bank independence various times, stressing the need for policy deliberations to be free of political considerations. "I'm deeply committed to that approach". "I believe in the Fed doing what's good for the country", Trump said in an interview with Reuters.

Other economists have argued, however, that the Fed's biggest mistake has been to have a policy that is too flexible and allow loans to lose control.

But Mr Powell's speech focused squarely on lessons learnt in past economic eras and how to apply them to the current situation, which he called "challenging".

Jerome Powell, who was this week attacked by the president for failing to give him "some help" on the U.S. economy, warned that steadily rising borrowing costs would be required to promote job creation and economic growth.

Market sentiment moved in a positive direction on the optimistic economic news that weekly jobless claims fell to 210,000 in July and approached a low not seen in forty-nine years.

"I've been upping my forecast".

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