In a hotly-anticipated speech Friday, Powell expressed confidence in the economy and said he does not see inflation tearing higher.
"I see the current path of gradually raising interest rates as the [Federal Open Market Committee's] approach to taking seriously both of these risks," he said, according to prepared remarks of a speech he delivered at 10 am ET.
The policymaking FOMC has approved seven quarter-point rate hikes in a cycle that began in December 2015. That has brought the current target for the benchmark funds rate to 1.75 percent to 2 percent. There have been two hikes in 2018, and committee members have indicated that two more are coming.
Despite Powell's generally upbeat commentary on the state of the economy, some bond traders pointed out that the central bank chief seemed content with where prices are.
Gary Pollack, head of fixed-income trading at Deutsche Bank Private Wealth Management, told CNBC that the chairman's comments indicate that the central bank is still debating whether to hike rates in December.
"The market obviously likes his speech, and while the overall comments were consistent with the minutes from the FOMC from Wednesday, there are nuisances in the speech that could be viewed dovishly," Pollack said.
"One such comment was that the economy is not overheating, and he had little concern that inflation will exceed the 2 percent level," Pollack added. "The Fed is comfortable where inflation is here."
Meanwhile, Cleveland Federal Reserve President Loretta Mester raised her outlook for the economy and gross domestic product for 2018, and said Friday that the central bank's plan for gradual interest rate increases is appropriate.
"I've been upping my forecast. I'm now at 2.75 percent to 3 percent for the year, probably closer to 3 percent," Mester told CNBC at the Fed's annual summit in Jackson Hole, Wyoming. "I think that the fiscal policy — the stimulus and the tax cuts — has been a positive for the economy in terms of demand growth, and so that's one of the factors."
"But also there's been more momentum in the economy than I might have anticipated," she added. "Again, we're at our targets, and yet we have accommodative monetary policy. Right now, this gradual upward path of policy rates seems appropriate to me."
Source: U.S. Bureau of Labor Statistics, Civilian Unemployment Rate; FRED.
President Donald Trump, unhappy with the Fed's decision to elevate borrowing costs, criticized Powell in an interview last month on CNBC, saying he was "not thrilled' with rising interest rates. He repeated that criticism in an interview published Monday by Reuters.
Many economists have lauded the Fed's plan, however, arguing that the central bank needs to stay on top of burgeoning inflation by keeping the money supply in check. Yields, however, remain lower on the week following the president's comments.
The normalization of interest rates, others argue, also provides central bankers with ammunition to combat future economic crises through lower rates.
"This is by any measure, this is a very solid U.S. economy, supported by fiscal policy and solid private spending," Nathan Sheets, chief economist at PGIM Fixed Income, told CNBC on Monday.
"By any theory of central banking, they need to move the rate back to neutral," he added. There are many more risks if they fail to do that. There's a strong case for the Fed to act pre-emptively."