Powell delivered the guidance in a highly anticipated speech on Friday at the central bank's annual symposium in Jackson Hole, WY.

Minutes after the speech, investors pegged the chances of a quarter-point interest rate cut at 91%, up from a 75% chance assessed one day earlier, according to CME FedWatch Tool, a measure of market sentiment. Despite the market's positive reaction to Powell's speech, the Fed chair voiced a note of caution for the outlook for the U.S. economy.

Federal Reserve Chair Jerome Powell has been under pressure from President Trump to lower the central bank's benchmark interest rate.