The financial markets initially cheered the notion that the Fed might soon decide to slow its hikes, with stock and bond prices surging higher.

Yet as his news conference got under way, Powell struck a harder line. He stressed that the Fed’s policymakers have seen little progress in their efforts to control inflation and would likely have to send rates even higher than they thought they would at their last meeting in September.

“We still have some ways to go,” he said. “Incoming data since our last meeting suggests” that the officials might have to raise rates higher than the 4.6% they forecast in September.

The Fed chair pointedly emphasized that it would be “very premature” to even think about halting the rate hikes. Inflation pressures, he said, remain far too high.

The abrupt shift in tone gave the financial markets whiplash. Stocks sharply reversed their gains and tumbled into the close of trading. The Dow Jones Industrial Average ended the day down over 500 points, or about 1.5%.

“I think he accomplished his goal” of striking hawkish and dovish notes, said Vince Reinhart, chief economist at Dreyfus and Mellon. (“Hawks” generally prefer higher rates to fight inflation, while “doves” often lean more toward lower rates to support hiring.) “That’s why the market was so confused.”

The Fed’s meeting occurred as financial markets and many economists have grown nervous that Powell will end up leading the central bank to raise borrowing costs higher than needed to tame inflation and will cause a painful recession in the process.

Powell implicitly addressed those fears at his news conference. He kept the door open to downshifting to a half-point hike when the Fed next meets in December. The central bank could then step down even further to a quarter-point increase — a more typically sized rate hike — early next year.

“At some point,” he said, “it will become appropriate to slow the pace of increases. So that time is coming, and it may come as soon as the next meeting or the one after that. No decision has been made.”

At the same time, Powell noted that the job market remains strong, which means many businesses must raise pay to keep workers — raises that are often passed on to consumers in the form of higher prices.

This week, the government reported that companies posted more job openings in September than in August. There are now 1.9 available jobs for each unemployed worker, an unusually large supply, which also fuels bigger pay increases and adds to inflationary pressures.

Overall, Powell said the Fed has made little progress against inflation so far.

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