The market’s euphoria, which analysts warned might be an overreaction by investors, underscored Fed Chairman Jerome Powell’s struggles to strike the right pitch in an increasingly challenging economic and political environment

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With just two words Wednesday, the Federal Reserve’s chairman sent stocks surging by raising hopes that the central bank might be closer to ending its push to drive up interest rates.

Chairman Jerome Powell said the Fed’s benchmark interest rate was “just below” the neutral level, meaning the central bank was close to the point where it would not be tapping on the brakes or pressing on the gas. Only last month, Powell had said it was “a long way” from neutral, leaving investors worried that the rate increases would crimp growth.

The small change sent the S&P 500 index soaring 2.3 percent, erasing the losses from a rocky November. To investors, the new wording meant that the Fed might leave rates closer to their current level, keeping in place the steady fuel that low rates have provided to a 10-yearlong bull market.

Analysts quickly warned that investors were overreacting. There was little evidence in the rest of Powell’s speech that he intended to signal a change in plans.

But the market’s euphoria underscored the chairman’s struggles to strike the right pitch in an increasingly challenging economic and political environment, as President Donald Trump attacks the Fed and the country’s growth comes under pressure. The market has been jittery over concerns that further rate increases could undermine the economy at a time when the prospects for companies and consumers may be softening.

The economy has been a picture of health, expanding at a 3.5 percent annualized pace during the third quarter. The unemployment rate has fallen to 3.7 percent, its lowest level in almost half a century. Inflation has picked up this year, and Powell on Wednesday highlighted signs of increased risk-taking in some financial markets, including lending to corporations.

But Trump has relentlessly criticized the central bank, and Powell in particular, for raising interest rates, arguing that the Fed is choking growth. Emerging signs of weakness in some parts of the economy, including auto manufacturing, agriculture and housing, are also raising concerns that the best part of the long recovery might now be in the rearview mirror.

“We’re in the 10th year of the expansion, and there are some soft points,” said Ellen Hughes-Cromwick, a former chief economist at Ford Motor and the Commerce Department who is now the associate director of the University of Michigan’s Energy Institute. “The auto-sales cycle has peaked, and the housing cycle also has peaked.”

Hughes-Cromwick said that she did not foresee an imminent end to growth, but that higher interest rates, combined with rising inflation and faltering corporate confidence, could set the stage for a recession. If those things happen, “I don’t really see how the economy can keep powering ahead,” she said.

Most economic forecasters, including at various government agencies and big Wall Street banks, expect the U.S. economy to continue growing in 2019. But there is a broad consensus that the pace will slow as the sugar high provided by the Trump administration’s $1.5 trillion tax cut and spending increases begin to wear off. Some forecasters see a small, but growing, chance of a recession.

“This is a geriatric expansion,” said David Kelly, chief global strategist at J.P. Morgan Asset Management.

He noted that if growth continued through next summer, this would become the longest expansion of the U.S. economy since at least the Civil War. Economists have long argued that expansions do not die of old age. But the end of Trump’s stimulus is likely to drop growth back toward a 2 percent annual rate, leaving little margin for error.

“It wouldn’t take much to go wrong to put us into a recession,” Kelly said.

Trump’s chief economic adviser, Larry Kudlow, tried to play down such concerns Tuesday.

“There’s a certain amount of pessimism I’m reading about. Maybe it has to do with a mild stock-market correction,” Kudlow said, before saying such fears were misplaced. He rattled off recent economic data — including the latest jobs report, which he described as “very spiffy” — before concluding, “We’re in very good shape.”

Powell also reiterated Wednesday that the economy was doing well, that inflation was under control and that no glaring risks were on the horizon. Against that backdrop, the Fed is still expected to raise its benchmark rate in December. Powell emphasized that the Fed would make decisions about future increases by keeping a close eye on the economy.

“We know that moving too fast would risk shortening the expansion,” he said Wednesday, in remarks before the Economic Club of New York. “We also know that moving too slowly — keeping interest rates too low for too long — could risk other distortions in the form of higher inflation or destabilizing financial imbalances.”

The Fed’s benchmark rate currently sits in a range of 2 to 2.25 percent. In September, Fed officials estimated that the neutral rate is between 2.5 and 3.5 percent. Most officials predicted the central bank would raise rates three times in 2019.

In the view of many analysts, Trump and Powell themselves pose the greatest threats to continued growth.

Trump’s trade war with China is inflicting pain on some parts of the economy, notably in the Midwestern farm belt, where growers of soybeans and other crops have lost access to their largest export market.

The Fed’s interest-rate increases are also weighing on some parts of the economy, including home building. Sales of new and existing homes have fallen in recent months as interest rates on mortgage loans have risen.

The automobile industry is being battered by the tariffs and rate increases. Trump’s tariffs on aluminum and steel have raised costs, while higher rates have discouraged some potential buyers. Auto sales have been in decline since 2016, and General Motors said this week that it would cut 14,000 jobs and shut down five North American factories.

Trump has insisted loudly and repeatedly that the Fed should be held responsible for any economic weakness. In an interview with The Washington Post on Tuesday, the president said the Fed was a “much bigger problem than China.”

“I’m not being accommodated by the Fed,” Trump told The Post. “I’m not happy with the Fed. They’re making a mistake because I have a gut, and my gut tells me more sometimes than anybody else’s brain can ever tell me.”

In publicly berating the Fed, Trump is breaking sharply with the practice of recent administrations, which maintained a studied silence about monetary policy.

One reason is that urging the Fed to move can be counterproductive. The Fed likes to present itself as a technocratic institution that floats above the political fray. While some policymakers and economic analysts argue that the Fed should suspend rate increases, such a pause would now expose the Fed to criticism that it is acceding to Trump.

Powell has insisted that the Fed will act without regard to Trump’s statements. In a recent speech, he emphasized that the central bank is overseen by Congress, not the president.

But Powell added to his own challenges in October, in an unscripted answer to a question about how high the Fed might need to raise rates.

“We may go past neutral,” Powell said during an interview at the Atlantic Festival, “but we’re a long way from neutral at this point, probably.”

Powell’s subsequent remarks on the subject strongly suggest that he would have liked to have chosen his words more carefully. Powell and other Fed officials also have emphasized that the exact level of the neutral rate is not important to the central bank’s plans.

Some Fed officials, however, have said they want to pause at that point to consider whether further increases are warranted. Others have said they want to raise rates more, judging that the economy will need a little restraint.

Richard H. Clarida, the Fed’s vice chairman, said Tuesday that deciding how high to go would require “judgment and humility.”