Editor’s note: This story has been updated with additional details.

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 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 Caution 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.

Powell Pushes Back Recession Concerns, Refrains From Tariff Judgement

During the Q&A session, Powell pushed back against recession risks and reiterated the broader strength of the economy.

Sen. John Kennedy (R-LA) questioned the Fed's influence over long-term bond yields, to which Powell responded, "We have some influence, but mostly not."

The Fed Chair indicated that long-term rates are driven by future short-term rate expectations, inflation risks, and the budget deficit—factors beyond the Fed's direct control.

When asked if a president could remove a Federal Reserve Board member, Powell said, "It's not allowed under the law."

On trade policy, Sen. Jack Reed (D-RI) referenced Powell's 2018 statement that "countries that have remained open to trade, that have not erected barriers, including tariffs, have grown faster and achieved higher incomes."

Powell stood by that view but refrained from commenting on specific trade policies, including President Donald Trump's tariffs on China, Canada, and Mexico.

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