The Federal Reserve remains "very far" from its target inflation rate and nearly all members of its decision-making committee support at least one additional interest rate hike, Fed Chair Jerome Powell told House lawmakers on Wednesday.
Inflation has fallen significantly from a peak last summer but remains at a level double the Federal Reserve's target of 2%.
"We're very far from our inflation target," Powell told members of the House Financial Services Committee on Wednesday. "We're very focused on getting back to 2%."
Elevated inflation continues to threaten Americans, especially low-income people, by eating away at their household budgets, Powell said.
Price hikes hurt "people generally at the lower end of the income spectrum much harder than people at the middle or the high end because high inflation can get you in trouble right away if you're living on a fixed income just to cover the basic necessities," Powell said.
"It's for the benefit of those people that we must get inflation under control," he added.
The slowdown of price increases from the peak last summer has coincided with a sharp escalation of the Federal Reserve's benchmark interest rate last seen in the 1980s.
However, the Federal Reserve earlier this month paused its aggressive series of interest rate hikes, ending a string of 10 consecutive rate increases that stretches back 15 months.
Over that period, the Federal Reserve has aimed to roll back price increases by slowing down the economy and slashing consumer demand. The approach, however, risks tipping the economy into a recession.
Data released in recent months suggests that the policy approach has succeeded in slowing economic activity while averting a downturn.
U.S. gross domestic product grew by a sluggish 1.1% annualized rate over the three months ending in March, according to government data.
Consumer spending and hiring, meanwhile, have remained solid.
A jobs report earlier this month showed that the labor market grew robustly in May, adding 339,000 jobs compared to Wall Street estimates of just 195,000.
Addressing lawmakers on Wednesday, Powell defended the central bank's decision to pause interest rates earlier this month while simultaneously acknowledging that inflation remains well above target levels and at least one additional rate hike will likely be necessary
"The two things are entirely consistent," Powell said. "The level at which we raise rates is entirely separate from the speed at which we move."
"We're moderating that pace," he added. "If you're driving 75 miles an hour on a highway, then 50 miles an hour on a local highway, then as you get closer to your destination, as you try to find that destination, you slow down even further."