Asian markets cautious as everything rides on dovish Powell

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And last week the government reported that after a tepid job gain in May, U.S. employers sharply stepped up their hiring in June, an indication of the economy's durability.

Some Fed officials, however, said that while they expected fewer rate hikes than they had in the past, "there was not yet a strong case for a rate cut from current levels". Powell said Wednesday he would not resign if asked to do so by Trump.

Powell presented his remarks and then took questions from members of the US House of Representatives Committee on Financial Services.

The Fed chair went on to reiterate that the central bank would "act as appropriate" to sustain economic expansion.

Overnight, Atlanta Fed bank president Raphael Bostic let nothing out of the bag by saying the central bank was debating the risks and benefits of letting the USA economy run "a little hotter".

Mr Powell, giving evidence to a hearing in Washington, has come under pressure from Donald Trump to cut rates. -China trade war and agreed to resume talks toward a deal that would meet the administration's demands to better protect US technology.

Powell said any regulatory review of the recently announced project should be "patient and careful". Although he expected continued USA growth, he warned of economic weakness in other major economies, and a downturn in business investment driven by trade war worries.

Fed Chair Jerome Powell said in prepared congressional testimony that a slowing global economy and trade tensions had strengthened the case for looser monetary policy. "To me, it all depends on where you look in the economy".

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The S&P 500 index and the Dow Jones Industrial Average each rose about 0.6% in the first half-hour of trading Wednesday.

Worker pay isn't rising fast enough to push up inflation, Federal Reserve Chairman Jerome Powell says, even with the unemployment rate near a five-decade low.

Asian shares inched ahead on Wednesday while higher Treasury yields lifted the dollar as markets wondered if the world's most powerful central banker would confirm or confound expectations for United States policy easing this month. Bond yields fell, sending the yield on the 10-year Treasury note down to 2.05% from 2.10% just before Powell's remarks were released.

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.

Ashworth said a July rate cut would be "insurance against the downside risk that Fed officials believe have mounted in recent months".

The greenback hit session lows versus the euro and yen after Powell's comments, which reinforced expectations the Fed will cut interest rates for the first time in a decade at its next monetary policy meeting later this month.

US economic fundamentals may not have changed much in the days that followed Trump's May 30 comments on Twitter threatening to impose tariffs on Mexico unless the country met his demands for tougher controls on immigrants crossing the US-Mexico border.

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