Federal Reserve Chairman Jerome Powell says he's pleased with the state of the U.S. economy but cautions that some forms of corporate debt have reached risky levels. At the same time, Powell says the financial system and markets appear far sturdier than they did before the 2008 crisis.

Powell says in a speech to the Economic Club of New York that the Fed is monitoring potential vulnerabilities in the banking system to ensure its continued stability.

"We see no major asset class," Powell says, "where valuations appear far in excess of standard benchmarks."

Powell stresses that future interest rate hikes aren't on a "preset policy path," which may suggest that the Fed would consider a pause in its rate hikes next year to assess the impact of its credit tightening.