Policymakers are preparing to hold rates steady later this month.
Fed officials will gather in September and futures markets are pricing in almost no chance of a rate hike.
The Fed chair suggested the Fed could hold rates steady at its next meeting in September, as investors expect.
The decision left the benchmark federal funds rate in a target range of 5% to 5.25%.
The Fed is on the verge of pausing one of the fastest rate-hiking campaigns in its history.
Investors pared bets on a rate hike next month to around 13% after Powell's comments compared with 33% before he spoke.
The central bank will revisit the range of rules that apply to firms with more than $100 billion in assets.
Fed staff forecast a "mild recession" for later this year.
San Francisco Fed examiners identified warning signs at the California lender more than a year ago, to no avail.
Traders bet the Fed is likely to raise rates by a half point at the next meeting later this month.
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