The US government has been partially shuttered since late December as President Donald Trump has refused to sign a budget agreement unless Congress agrees to allocate $5 billion for a border wall.
About 800,000 federal workers, including air traffic controllers and members of the Coast Guard, have been without pay for three weeks.
"In the short term if government shutdowns don't last very long they've typically not left much of a mark on the economy," Powell said.
He also worried about the lack of key economic statistics during the government shutdown that the Fed uses to take the temperature of the economy.