A condition for lowering interest rates is the belief that inflation is falling towards the 2% target set by the US central bank, Fed chief Jerome Powell emphasized today before a US Senate committee.

“We don’t see that happening anytime soonPowell said during his second day of testimony to Congress. “A condition for that is that we are convinced that inflation is moving back towards the 2% target (that we have set),” the Fed chief said.

During yesterday’s hearing before a House committee, Powell said he would not call the Fed’s recent decision to keep interest rates unchanged (between 5% and 5.25%) a “pause” after 10 consecutive hikes, noting that “virtually everyone” on the Fed’s monetary policy committee sees interest rate hikes further “at a more subdued pace” through the end of the year.

He explained that although inflation has been contained, it remains “well above the 2% target”.

“We still have a long way to go, but we are making progress“, he emphasized.

At the last meeting of the Fed’s monetary policy committee, a further increase in interest rates by the end of the year was described as likely. Most US central bank officials are predicting two more rate hikes, by 25 basis points each.

The Fed’s next meeting is scheduled for July 25-26.