"What we really need is to bring growth down from its very high levels of last year, to slow it down but still be positive," so that supply and demand can be at the same level, and for inflation to slow down, he said in a conversation with the Wall Street Journal.
The institution will tighten its monetary conditions sharply until there is "clear" evidence that inflation is slowing, Powell said.
If inflation is not decelerating fast enough, "then we will have to consider acting more aggressively," he said.
If the price curve was truly slowing, "then we can consider moving to a slower pace."
The Fed began in March to raise its key rates in order to slow down inflation, which is at its highest in 40 years.
After an initial increase of a quarter of a point in mid-March, it resorted to a faster increase, of half a point directly, in early May, the strongest since 2000.
Key rates are now in a range of 0.75 to 1.00%.
Further increases should be decided at the next two meetings, mid-June and end-July, probably by half a point each, repeated Jerome Powell on Tuesday.
The goal is for rates to return to a so-called “neutral” level, which neither stimulates nor slows down the economy, and is considered to be between 2.00 and 2.50%, up to 3.00%.
This level could be reached "in the fourth quarter", underlined Jerome Powell, specifying: "we do not know for sure where the neutral rate is".
© 2022 AFP