Jerome H. Powell, the Federal Reserve chair, reiterated that policymakers have been poised to carry rates of interest regular at a excessive degree as they waited for proof that inflation is slowing additional.

Fed officers entered 2024 anticipating to make rate of interest cuts, having lifted borrowing prices sharply to a greater than two-decade excessive of 5.3 p.c between 2022 and the center of final yr. However stubbornly speedy inflation in latest months has upended that plan.

Central bankers have been clear that price cuts this yr are nonetheless potential, however they’ve additionally signaled that they’re planning to go away rates of interest on maintain for now as they wait to guarantee that inflation is genuinely coming underneath management.

Talking throughout a panel dialogue in Amsterdam, Mr. Powell stated that officers had been shocked by latest inflation readings. The Client Value Index inflation measure, which is ready for launch on Wednesday, got here down quickly in 2023 however has gotten caught above 3 p.c this yr. The Fed’s most popular measure, the Private Consumption Expenditures index, is barely cooler, but it surely, too, stays nicely above the Fed’s 2 p.c inflation purpose.

“We didn’t count on this to be a clean highway, however these have been larger than I feel anyone anticipated,” Mr. Powell stated on Tuesday of latest inflation readings. “What that has informed us is that we’ll should be affected person and let restrictive coverage do its work.”

Mr. Powell stated that he anticipated continued progress and a powerful labor market within the months forward, and that he believed inflation would start to sluggish once more.

However, he stated, “my confidence in that isn’t as excessive because it was, having seen these readings within the first three months of the yr.”

The Fed chair made clear that additional rates of interest will increase usually are not anticipated, although not unattainable. He stated that there was a “very small chance” that the Fed would want to entertain lifting once more, however that he didn’t suppose that was the most certainly final result.

“It’s actually a query of retaining coverage on the present price for an extended time than had been thought,” Mr. Powell stated. “The query is: Is it sufficiently restrictive, and I feel that’s going to be a query that point should inform.”

The Fed chair stated that he nonetheless anticipated lease, a significant driver of the latest inflation, to ultimately pull down value will increase. However he acknowledged that the cool-down is taking longer than anticipated.

He additionally famous that it may very well be taking longer for coverage to work this time round, partly as a result of owners and companies locked in very low rates of interest when borrowing prices have been at rock-bottom within the 2010s and in 2020.

“The U.S. economic system is totally different this time,” Mr. Powell stated.

Nonetheless, he stated repeatedly that he thought rates of interest have been excessive sufficient to regularly weigh on progress and ultimately carry inflation down the remainder of the way in which.

“Originally, we have been very involved that the very excessive inflation we noticed is perhaps fairly tough to carry down and not using a very vital decline in employment and weakening financial exercise — that didn’t occur, that’s only a nice consequence,” Mr. Powell stated.

Though inflation has come down considerably from its highs in 2022, People are unhappy with the state of the economic system, a reality that’s clear in low client confidence ranges. Mr. Powell attributed that dissatisfaction to continued excessive value ranges.

As a result of inflation measures adjustments in value, slower inflation simply signifies that costs are not going up as rapidly, not that they’re coming down after their speedy 2021 and 2022 run-up.

“You inform individuals: ‘Inflation is coming down,’ they usually suppose ‘I don’t perceive that,’” Mr. Powell stated. “Significantly individuals on the decrease finish of the earnings spectrum are very hard-hit by inflation, from the beginning, which is why we’re so dedicated to restoring value stability and retaining it in place.”