In his testimony to the House Financial Services committee, Powell strongly signaled that the Fed would likely lower interest rates in the months ahead in part because trade disputes and a slowing global economy have created clouds of "uncertainty" that are weighing on the US economy.
The Wall Street Journal reported that "the S&P 500 and the Nasdaq Composite touched all-time highs, with the S&P briefly eclipsing the 3000 level for the first time" in intraday trading before subsiding ahead of the close.
In his prepared remarks, Powell made no mention of the president's criticism.
Powell's prepared testimony assuaged those fears, though it appears that the Fed will remain cagey on when it intends to cut rates. Trump wrote on Twitter earlier this month, the latest in a series of unprecedented attacks on the independence of the Fed by a sitting president.
"The Fed's consideration of rate cuts is not only about growth but also about inflation, which remains well below target, and inflation expectations, which were breaking to the downside before the Fed signalled the likelihood of cuts". As the economy recovered the central bank began slowly raising rates.
Many investors have put the odds of a rate cut this month at 100%.
Powell noted that he supports financial innovation as long as appropriate risks are identified, but he said the massive platform enjoyed by Facebook immediately sets Libra apart from other digital currency projects.
"Many judged additional monetary policy accommodation would be warranted in the near term should these recent developments prove to be sustained and continue to weigh on the economic outlook, " according to the minutes of the June 18-19 Federal Open Market Committee released Wednesday in Washington. "We in Congress, both Democrats and Republicans, have got your back".
At the moment, the USA economic landscape is a mixed one: The job market appears resilient, but economic growth is slowing. But as clearly demonstrated by Powell's testimony Wednesday, the Fed is not joining the #resistance. Many forecasters predict that growth has slowed to an annual rate of around 2% in the just completed April-June quarter.
Powell said any regulatory review of the project should be "patient and careful".
He said that growth in business investment "seems to have slowed notably", possibly because of concerns over slowing global growth and the trade battle between the United States and China. But with unemployment at close to record lows and the U.S. economy showing continued strength, the Fed left rates unchanged at it's last meeting. An absence of inflation pressure makes it easier for the Fed to cut short-term rates.
The Fed's skittish outlook for the economy - which meanwhile downplayed the risks of inflation despite a strong job market - sent stocks roaring as it strengthened the central bank's case to take action to prolong an 11-year expansion. Trump and Chinese President Xi Jinping declared a truce last month in what had threatened to become an escalating U.S. -China trade war and agreed to resume talks toward a deal that would meet the administration's demands to better protect USA technology.
The Fed hasn't cut rates since 2008 at the height of the financial crisis.
By the end of the month, both that concern and Trump's complaints are likely to be rendered moot.