What is worrying the Fed now are looming risks to the economy. Mr. Powell told lawmakers that “uncertainties about the outlook have increased in recent months,” adding that “a number of government policy issues have yet to be resolved, including trade developments, the federal debt ceiling and Brexit,” referring to Britain’s negotiations to exit the European Union.

The federal debt ceiling may need to be raised early this fall for the government to borrow more money and avoid default.

The United States and China have agreed to restart trade negotiations, but Mr. Powell said that did not eliminate the economic risks emanating from the dispute, which has begun to hurt confidence and business spending around the globe. Mr. Trump has already placed tariffs on $250 billion worth of Chinese goods and China has retaliated against American products. A resolution is far from certain.

“We’ve agreed to begin discussions again with China — while that’s a constructive step, it doesn’t remove the uncertainty,” Mr. Powell said, adding that a strong June jobs report did not change the outlook on interest rates. “The uncertainties around global growth and trade continue to weigh on the outlook,” he said. “In addition, inflation continues to be muted.”

Investors fully expect a cut of a quarter-percentage point at the Fed’s July 30 to July 31 meeting, and bets that the move could be as big as half a percentage point climbed on Wednesday.

Mr. Powell did not explicitly say a rate cut is coming, but he pointed to mounting economic concerns and made no effort to walk back market pricing for expectations of a cut in July. He also did not rule out the possibility of a larger cut when given the chance to do so. The Fed’s pre-meeting blackout period starts July 20, so officials have just this week and next to manage expectations.

The 17-member Fed policymaking committee was split in June over whether the central bank should cut rates this year, with eight officials projecting a cut before the end of the year and nine pointing to no change or a rate increase. Minutes from the June meeting that were released on Wednesday reinforced Mr. Powell’s message. Many Fed officials thought a rate cut could be warranted “in the near term” if uncertainty persisted, the notes show.