For her part, Blerina Uruci at Barclays Research pointed out to clients how core goods inflation had come out of deflation for the first time since January, while core services prices had built on higher shelter costs. Economists expect the reduction will likely be a quarter-point. Here's a sampling, taken from two days of Powell's testimony to Congress.
Powell was asked at the hearing by Carolyn Maloney, Democratic representative from the state of NY, if the Fed considers a half-percentage-point lowering of the benchmark interest rate during the July 30-31 FOMC meeting.
In his prepared statement on Wednesday, Powell said that since Fed officials met last month, "uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the US economic outlook".
The core personal consumption expenditure price index, the Fed's preferred inflation gauge that excludes volatile food and energy prices, rose 1.6 percent year on year in May, below the 2 percent target.
Several policymakers appeared to support cutting rates soon essentially as an insurance policy, because it "could help cushion the effects of possible future adverse shocks to the economy".
But the ongoing trade wars and signs of trouble in markets outside the United States appear to have convinced more Fed members that there is now a case for cutting rates.
USA stocks traded higher, with the S&P 500 briefly crossing the 3,000-point mark for the first time.
The dollar index against a basket of six major currencies stood little changed at 97.081 after retracing much of its losses on Thursday, when it had briefly stooped to a six-day low of 96.795.
"This report won't stop the Fed from easing on the 31st but it does suggest that a 50 (basis point) cut would be risky", Ian Shepherdson of Pantheon Macroeconomics said in a client note.
The short version: Global growth is weak, manufacturers are slowing their investments and not raising their prices partly because of the trade war and the USA job market is not hot enough to cause worrisome inflation.
The kiwi traded at 95.54 Australian cents from 95.42 cents this morning.
"Uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the USA outlook", Powell said.
Senator Richard Shelby of Alabama, often a critic of the central bank, also offered Powell his backing in the face of Trump's pressure.
"We don't have any evidence for calling this a hot labor market", Powell told lawmakers.
"To call something hot, you need to see some heat", he said, adding that the economy can tolerate a lower jobless rate than the Fed previously thought.
'The economy is in a very good place and we want to use our tools to keep it there...'
Powell's prepared testimony to the Senate Banking Committee is identical to the remarks he delivered Wednesday before the House Financial Services Committee on Wednesday.
Policymakers also appear to be far more anxious about a lack of confidence that is seeping into troubling spending and pricing decisions.
A rate cut at the July 30-31 policy meeting, the first in a decade, is nearly certain after Fed Chairman Jerome Powell on Wednesday told lawmakers the USA central bank would "act as appropriate" to protect the economy from rising risks such as trade tensions and slowing global growth.
The Fed, which hiked rates four times previous year, has kept its current benchmark overnight interest rate in a range of between 2.25% and 2.50% since December.
On the trade front, President Donald Trump earlier tweeted that China is "letting us down in that they have not been buying the agricultural products from our great farmers that they said they would".
Under questioning from committee Chair Maxine Waters, Powell said he would rebuff any demand from Trump that he resign.
Powell is on the record as saying he would not leave his position, as under the law he is entitled to four years.
Retaliatory tariffs remain a persistent worry for markets.