Stock markets have been cheered by comments from Powell on Wednesday that signalled this year's frantic pace of U.S. interest rate hikes could be about to slow.
The S&P 500, a broad gauge of U.S. stocks, on Thursday rose to its highest level since September.
Wei Li, speaking at a media briefing on the 2023 outlook by BlackRock Investment Institute (BII), said Powell's comments also suggested that rates would stay at elevated level for a while.
"We cannot extrapolate what happens in every meeting. What really matters is when rates peak and also when rate cuts happen, and none of that has changed since the comments Powell made yesterday," she said.
"That is why we are not chasing the rally at the moment."
The Fed's next rate decision is on Dec. 14 and the central bank is widely expected to slow the pace of its rates hikes to 50 bps.
Expectations that inflation has peaked and the pace of U.S. rate hikes will now slow have also taken the shine off the dollar, which has soared over 9% this year against a basket of other major currencies.
Li said dollar momentum was likely to slow next year, adding that BII expected a recession next year.
"Inflation will also come down even though it will settle at a level that is higher than pre-pandemic levels and central banks will pause," she said.
"So all of that means the dollar will not continue with the momentum that we have seen so far in 2022."
(Reporting by Jorgelina do Rosario and Nell Mackenzie, writing by Dhara Ranasinghe; editing by Karin Strohecker and Susan Fenton)
