Federal Reserve Chair Jerome Powell warned on Tuesday that stronger than expected economic data could lead to more rate hikes, as the United States' inflation is starting to cool, but the road ahead will likely be long and bumpy.
The US central bank has tempered its aggressive campaign to rein in surging inflation by opting for smaller increases to the benchmark lending rate after several steep hikes.
The jobs market is hotter than policymakers like and that is adding stress to the inflation fight, as a disinflation process takes place mainly in the goods sector.
Powell said that if data were to come in stronger than we expected, and we were to conclude that we needed to raise rates more, we would certainly do that," Powell said in an event in Washington on Tuesday.
He said that the process of lowering inflation has a long way to go.