"The most likely outcome is that the challenges posed to (emerging markets) by the normalization of global financial conditions will be manageable," Powell said at an Institute for International Finance event in Washington on the sidelines of the International Monetary Fund and World Bank semi-annual meetings.
The influential Fed governor noted that while vulnerabilities in emerging markets have been rising, they remain well below crisis-prone periods in decades past, and that capital flows have been moving in line with fundamentals.
However, he cautioned that while the reaction to interest rate rises in the United States had so far been benign in emerging markets, significant risks remained.
"The corporate debt situation in (emerging markets) has been worsening, particularly in China, and market reactions to even small surprises can be unpredictable and outsized," Powell said.
Powell also said that the U.S. central bank will continue to raise interest rates gradually as along as economic data holds up.
"It bears remembering that Fed policy normalization is occurring not in isolation, but in the context of a solid U.S. economic recovery, which should benefit all economies around the world," he said.
Powell is among a shortlist being considered by U.S. President Donald Trump for Fed chair should current chair Janet Yellen not be reappointed when her term expires in early February.
(Reporting by Lindsay Dunsmuir; Editing by Chizu Nomiyama)