Talking about the central bank's future monetary policy move during an event held by the Council on Foreign Relations in NY on Tuesday, Powell admitted that he and his colleagues have been grappling with the question that "whether these uncertainties will continue to weigh on the outlook and thus call for additional policy accommodation".
"While Powell's comments do not alter expectations that the Fed will ease sooner or later, they do leave a slightly negative impact on equities", said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.
In an interview with Bloomberg television, Bullard said an "insurance cut" of a quarter-point would be enough to protect against a sharper-than-expected slowdown in economic growth and a half-percentage point cut would be "overdone".
Also arguing for a cut at last week's meeting was Minneapolis Fed President Neel Kashkari, who doesn't have a vote on interest rates this year.
But markets showed disappointment with Powell's comments, which suggested a rate cut was not certain.
The Fed has recently downgraded its estimate of a neutral rate down to 2.5 per cent - suggesting its current policies aren't supporting or stifling the pace of GDP growth.
Trump repeated Wednesday that he has the right to demote Powell or fire but wouldn't say whether he would.
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The baseline outlook for the US economy remains favorable for continued growth, Powell said, but "the risks to this favorable baseline outlook appear to have grown". "But we won't make mistakes of integrity or character".
Powell, however, said Fed policymakers are wrestling with questions on whether uncertainties around US tariffs, Washington's conflict with trading partners and tame inflation require a rate cut.
In early May, Trump more than doubled the tariffs on Chinese goods after U.S. "China trade talks are quite low, so any signs of an improvement could bode well for risk sentiment".
In the meantime, policymakers will be closely watching data on United States economic growth and jobs as well as the G20 summit in Osaka, Japan, at the end of the week, where Trump is due to meet one-on-one with at least eight world leaders, including ChineseP resident Xi Jinping, for discussions on trade.
Powell said trade developments are leading to a drop in business confidence.
Powell reiterated Tuesday that any rate changes would depend on economic data, not politics.
However Mr Trump has bitterly attacked the USA central bank since a year ago, accusing it of tightening monetary policy too quickly and preventing what he says could be skyrocketing economic growth.
Investors have always been anticipating rate cuts this year even as Fed policymakers had once suggested such a move would have been premature or even irresponsible in light of a strong labour market and lofty asset prices.