U.S. Federal Reserve Chairman Jerome Powell said Friday that the central bank is "prepared" to raise interest rates further as necessary to contain stubborn inflation.
In a closely watched speech at an annual conference of central bankers in Jackson Hole, Wyoming, Powell said the U.S. economy has been expanding more robustly than predicted and suggested inflation will not come down to the Fed's target of 2 percent anytime soon.
"Although inflation has moved down from its peak -- a welcome development -- it remains too high," he said. "We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective."
Still, he highlighted that there is always uncertainty and reiterated that the need for further rate increases will hinge on economic figures to be released in the coming months.
At its most recent policy-setting meeting in July, the Fed raised its benchmark interest rate by another 0.25 percentage point to the highest level in 22 years, following a pause in the previous month.
The hike brought the federal funds rate, which banks charge each other for overnight borrowing, to a new target range of between 5.25 percent and 5.5 percent.
It was the 11th hike since March 2022, when the U.S. central bank raised the key rate from near zero.
On Friday, Powell said in the conclusion of his remarks at the symposium, "As is often the case, we are navigating by the stars under cloudy skies. In such circumstances, risk-management considerations are critical."
"At upcoming meetings, we will assess our progress based on the totality of the data and the evolving outlook and risks," he said. "Based on this assessment, we will proceed carefully as we decide whether to tighten further or, instead, to hold the policy rate constant and await further data."
