1:30 pm: Toward the end of his talk, Powell sought to emphasize the Fed is willing to change its plans -- if needed.

"We're very flexible in adapting our policy if the economy moves, as it often does, in ways we don't expect," he said.

1:14 pm: Powell isn't buying into that 2019 recession talk.

“I don’t see anything that suggests the possibility of a recession in the near term is at all elevated,” he said.

Why? Powell said recent recessions have been caused by the Fed having to “hit the brakes” to combat high inflation or “asset bubbles.” Right now, the Fed doesn’t see evidence of either.

“I don’t see a recession,” Powell said.

However, the Fed chief is less bullish on the world economy. “The US economy is solid. There is good momentum going into this year. The principal worry is global growth,” he said.

1:08 pm: Here's more evidence of Wall Street's focus on the Fed's balance sheet: Powell reiterated that the Fed wants to have its balance sheet "return to a more normal level."

Asked what qualifies for "normal," Powell said "I don't know the exact level."He noted that the balance sheet has declined to about $4 trillion, but that before the 2008 crisis it was below $1 trillion.

"It will be substantially smaller than it is now," Powell said.

Stocks turned negative after the comments, with the Dow recently down about 35 points.

1:05 pm: Powell is sounding cautious about the impact of a prolonged government shutdown.

“If we have an extended shutdown, I do think that would show up in the data pretty clearly,” Powell said.

But he noted that the economic data would also be muddied because the shutdown is impacting the Commerce Department, which operates the Bureau of Economic Analysis and the Census Bureau. Reports like retail sales and GDP could be sidelined.

“We would have a less clear picture into the economy if it were to go on much longer,” Powell said.

12:56 pm: Asked if he's bothered by President Donald Trump's attacks on the Fed, Powell said "no."

"We do not take political factors into consideration in our discussions or decisions at all."

Powell seemed open to, though not enthusiastic, about a potential meeting with Trump.

"I’m not aware of any Fed chair turning down an invitation from the White House, nor do I think that would be appropriate," Powell said.

But when Rubenstein asked if he'd be happy to accept an invitation, Powell simply repeated: "I'm not aware of anyone not accepting it."

12:48 pm: Powell describes the labor market as "very strong," but acknowledges the market turmoil.

"Financial markets are expressing a view of concern about downside risks associated with global growth and with trade," Powell said.

Asked if the Fed still plans two rate hikes, Powell emphasized there is not on a set course.

"We're in a place where we can be patient and flexible," he said. "We're waiting and watching."

Earlier: Jerome Powell has been moving markets – up and down – lately. The Fed chief will be in focus again this afternoon as he fields questions at the Economic Club of Washington.

Powell is scheduled to be interviewed soon by David Rubenstein, the billionaire co-founder of the Carlyle Group.

Soothing words from Powell on interest rates and the Fed’s balance sheet helped propel markets last Friday. That amounted to a redo for Powell, whose comments during a December 19 press conference deepened fear on Wall Street.

Which Powell will show up on Thursday? Stay tuned for live updates.