WASHINGTON (AFP, BLOOMBERG) - Federal Reserve chairman Jerome Powell struck an upbeat tone in gauging the ability of policy makers to extend the record US economic expansion, while signaling interest rates would probably remain on hold.

The remarks from Powell underscored central bankers' view that they are likely to hold their fire for the coming months after cutting interest rates three times this year.

"Monetary policy is now well positioned to support a strong labor market and return inflation decisively to our symmetric 2 per cent objective," Powell said in a speech to the Greater Providence Chamber of Commerce in Rhode Island.

The US central bank considers a 2 per cent inflation rate as an indicator of sustainable growth for the US economy and a level that keeps interest rates high enough to allow for lowering in the event of an economic downturn.

In a look back at developments over the year, Powell said that, while the outlook appeared healthy now, there had been some scares during 2019.

Weakening global growth and President Donald Trump's trade wars together hit US exports, weakened the manufacturing sector and sapped business confidence, which weighed down corporate investments.

Additionally, inflation was vexingly low, adding to worries of falling into a Japan-like cycle of low growth from which breaking from could be hard.

But the strong labour market and wage gains are supporting household spending and consumer confidence - representing about 70 per cent of the economy, said Powell.

"At this point in the long expansion, I see the glass as much more than half full," he said, according to prepared remarks, adding that, with the right policies "we can fill it further."

The Fed is due to hold its final policy meeting of the year from Dec 10-11. Futures markets as of Monday do not predict another rate cut until September of 2020.