Federal Reserve Chairman Jerome Powell said Wednesday he considers the central bank's benchmark interest rate to be near a neutral level, an important distinction from remarks he made less than two months ago.

"Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy — that is, neither speeding up nor slowing down growth," Powell told The Economic Club of New York in a speech being closely watched in what has become a volatile financial marketplace.

The chairman's observation on rates in early October helped set off a rough period on Wall Street, after he said the Fed was "a long way" from neutral. Major averages dipped briefly into a 10 percent correction and worries grew that more rate hikes might meaningfully slow down the strong economic growth of the past two years.

The fed funds rate, which is tied to most forms of consumer debt, currently is in a target range of 2 percent to 2.25 percent. Markets broadly expect another quarter-point hike in December, but there's been a wide disparity between investors and the Fed on where rates should head in 2019. Traders currently have just one increase priced in, whereas Fed officials in their most recent projections point to three.

In his prepared remarks Wednesday, Powell went straight at the core issue of where he sees rates.

A speech that broadly addressed financial conditions a decade after the financial crisis saw Powell also tackle the neutral question early on.

He made further statements to show that the Federal Open Market Committee, which sets interest rates, does not have a predetermined idea for where rates should be and will be making policy decisions instead on developing economic and financial conditions.

Markets reacted immediately to the speech, with stocks lurching higher and government bond yields nudging lower.