Federal Reserve Chair Jerome Powell said at an event that policymakers aren't in a rush to reach a "neutral" level for interest rates and will respond to economic data as it comes in.

At the same time, he said, the economy is strong, and the policymakers can take time to monitor the path of inflation.

But if inflation continues to inch upward, the central bank may decide it needs to leave rates high to avoid a repeat of runaway inflation. Inflation peaked at 9.1% in June 2022 before slowly making its way back down closer to the Fed's target range of 2%.