Federal Reserve Chair Jerome Powell reiterated on Tuesday that policymakers are in no "hurry" to adjust interest rates, citing lingering inflation pressures despite significant progress toward the Fed's 2% inflation goal.

Speaking before the Senate Banking Committee in Washington, Powell described the current economic landscape as one where "the economy is strong overall." with a labor market that has cooled from its overheated state but remains resilient.

Over the past four months, payroll job gains averaged 189,000 per month, while the unemployment rate held steady at 4% in January. Powell indicated that "the labor market is not a source of significant inflationary pressures."

On inflation, Powell highlighted a notable decline over the past two years but stressed that "inflation remains somewhat elevated."

The latest Personal Consumption Expenditures price index showed a 2.6% year-over-year increase as of December, with core PCE rising 2.8%, excluding volatile food and energy costs.

Powell Stresses Cautiousness In Interest Rate Policy

Since September, the Federal Open Market Committee has lowered the policy rate by a full percentage point from its peak.

Powell described this shift as "appropriate in light of the progress on inflation and the cooling in the labor market."

Despite these moves, Powell reiterated that "we do not need to be in a hurry to adjust our policy stance."

He stated that reducing interest rates “too fast or too much” could derail progress on inflation, while moving too slowly or too little "could unduly weaken economic activity and employment."

Going forward, the Fed will continue to remain data dependent, before making further policy adjustments.

[This article will be updated as new information emerges]