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By Erik Sherman

The Dow Jones Industrial Average spiked by over 550 points on Wednesday as traders responded to comments from Federal Reserve Chairman Jerome "Jay" Powell in his first speech since President Donald Trump blamed him for the recent stock market sell-off.

In prepared remarks for a speech at the Economic Club of New York, Powell said there is no "pre-set policy path" for interest rates, and focused his remarks on an economy that is "growing above trend."

"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 said.

His comments marked a change in outlook from those made just two months ago, which precipitated a correction by the S&P 500 index.

"Powell blinked," tweeted Jim Cramer, host of CNBC's Mad Money. "They did more homework. They recognized the economy peaked in October and they don't want to put us at the end of the cycle."

While the Fed is structured to be largely insulated from politics — and politicians largely have respected the organization and its officials in the past — Powell has faced an unprecedented amount of backlash from Trump.

In an interview with The Washington Post published on Tuesday, Trump rounded on his choice for Fed chairman, blaming Powell for recent stock market declines and also for this week's announcement by General Motors that it is laying off 15 percent of its workforce and closing five plants.

"So far, I’m not even a little bit happy with my selection of Jay," Trump told the Post. "I think the Fed is a much bigger problem than China."

He said the central bank is "way off-base with what they're doing," in raising interest rates that were at historical lows following the financial meltdown that started in 2007. Low interest rates were deemed necessary to help the economy recover and, as things improve, interest rates need to rise to avoid inflation.

But the president's claims that Powell is at fault for the recent stock market sell-off only hold up in part. While higher interest rates could affect stock prices to some degree, a more likely cause for lower share prices is that the tax cuts put in place last year may have run their course as a stimulus. Additionally, the increased deficits that pay for the cuts raise the concern that eventual interest payments on the federal debt could also slow the economy.

As for GM, according to internal communications to company managers obtained by CNBC, the current economy and company position were strong. The memos did mention rising interest rates, but there are other significant reasons, with GM also citing commodity prices and a problematic trade environment brought on by Trump’s trade war.

Separately, overall automobile sales have been slowing since 2016, according to government figures, and there has been a reduction in the percentage of 16-through-44-year-olds who have a driver’s license. That is why GM, Ford and other companies have begun to shift toward autonomous vehicle design with an eye to provide ride-sharing services.