Meanwhile, inflation has fallen farther from the Fed's target.
The blue-chip index soared 147.66 points moments after Thursday's open to hit 27,007.86 - blowing past an all-time intraday high of 26,983.45 that was reached a day earlier.
If the stock market was amid a severe correction or bear-market decline, we could conclude that the Fed would cut rates to support financial asset prices.
The Fed, which hiked rates four times past year, has kept its current benchmark overnight interest rate in a range of between 2.25% and 2.50% since December. The Fed Chair strongly hinted that he was ready to cut interest rates in order to boost the American economy, which was facing major global trade headwinds, and dealing with low inflation levels. The Fed's benchmark rate stands in a range of 2.25% to 2.5% after it raised rates four times past year - action that incited the initial attacks on the Powell Fed from Trump.
But relentless pressure from President Trump for a Fed rate cut could complicate matters for a central bank that prizes its independence. The quit rate is at a two-decade high, which suggests that the labor market remains strong. "Our most hard problem is not our competitors, it is the Federal Reserve!". She also referred to published reports that Trump had discussed firing Powell. If Trump called and asked him to resign, Powell said, "Of course, I would not do that".
Powell's remarks came ahead of two days of testimony in Congress on the economic and policy outlook. On Thursday, he will address the Senate Banking Committee.
Powell said while the USA labor market remains strong and consumer spending has been stable, the business investment growth rate has "slowed notably".
But the ongoing trade wars and signs of trouble in markets outside the USA appear to have convinced more Fed members that there is now a case for cutting rates. Although he expected continued U.S. growth, he warned of economic weakness in other major economies, and a downturn in business investment driven by trade war worries.
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In prepared remarks released before the hearing, Powell contrasted the Fed's "baseline outlook" of continued USA growth against a considerable set of risks - including persistently weak inflation, a slowdown in other major economies, and a downturn in business investment driven by trade risks.
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.
He repeated that the central bank would act appropriately to sustain the expansion, which last week became the longest in history.
Many Fed officials said that "the economy appeared to have lost some momentum", the minutes said, as business confidence, business spending, and manufacturing activity all weakened.
The Fed hasn't cut rates since 2008 at the height of the financial crisis.
Stocks were briefly knocked lower by a tweet from U.S. President Donald Trump, accusing China of "letting us down" by not promptly buying more U.S. farm products.
"The Fed has pretty much made it clear that the negatives of a cooling economy and ongoing trade tensions outweigh the positives of a Goldilocks inflation number and last week's solid jobs read".
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