With the Federal Reserve expected next month to raise rates to what some US central bankers believe is at or near a neutral level, Chairman Jerome Powell is retuning his message to signal a more cautious approach on further rate hikes next year.
His renewed focus on the "neutral" level of interest rates as a potential turning point for policy that until now has been on a steady tightening path is echoed by the minutes.
Investors welcomed his remarks because they appeared to retreat from a comment he made in early October describing the Fed's benchmark rate as a "long way" from a neutral level - which implied to some listeners that Mr. Powell planned to keep raising rates for a while.
And a "couple" said the Fed might be near the neutral rate, meaning more rate hikes "could unduly slow the expansion", driving down inflation.
Equities erased earlier declines after the minutes of the Federal Open Market Committee gathering were released, while the yield on the 10-year Treasury note was around 3.03%, holding its decline from earlier.
"The markets really got a head fake in October, (but on Wednesday) he strongly walked back those expectations", said Scott Anderson, chief economist at Bank of the West. But Powell's comments are prompting speculation among many investors that a looser policy may lie ahead.
He offered nothing to dispel market expectations of another rate increase at the Fed's policy meeting on December 18-19.
Although a December rate hike has been widely expected, the Fed's path next year has been more uncertain, with investors last month expecting two or even three rate hikes in 2019.
A few participants also expressed reservations about the timing of the next rate hike, suggesting that the benchmark rate - which determines the cost of borrowing on credit cards, mortgages and other loans - may now "be near its neutral level" and "further increases" could slow down the economy's expansion.
One irony of the market reaction to Mr. Powell's word choices is that he has spent considerable energy during his tenure as Fed chairman trying to emphasize the uncertainty of these estimates and to fashion a more plain-spoken approach to central-bank communications.
Still, Powell sent the stock market soaring by suggesting that interest rates are just below the so-called neutral rate at which they will neither boost nor slow growth.
Minutes of the USA central bank's November 7-8 meeting showed "almost all participants" agreed that another rate hike would likely be necessary "fairly soon".
"Powell took pains to state that the FOMC's rate projections are based on their best assessments of the economic outlook", Kevin Logan, chief USA economist for HSBC wrote in a Wednesday note to clients, referring to the policy-setting Federal Open Market Committee.
"Given the volatility you've seen recently, it's probably quite reasonable to expect a little bit of a bounce". It slowly began to raise them again in 2015 as the economy regained strength under Obama, and it has raised rates six times since Trump took office.
"There is a great deal to like about this outlook", Mr. Powell said. The benchmark rate, now at 2.00-2.25 percent, is within a quarter of a percentage point of the bottom of the Fed's range for neutral, but is also several quarter-point rate hikes below the mid-point estimate of 3 percent. But that doesn't mean rates won't rise further, as most officials said another rate increase was likely, perhaps as soon as next month. Bloomberg Economics anticipates three increases.