Jerome H. Powell, the Federal Reserve chair, reiterated Tuesday that policymakers have been poised to carry rates of interest regular at a excessive stage 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 fast inflation in latest months has upended that plan.

Central bankers have been clear that fee cuts this yr are nonetheless attainable, however they’ve additionally signaled that they’re planning to depart rates of interest on maintain for now as they wait to ensure that inflation is genuinely coming below management.

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

“We didn’t count on this to be a easy street, however these have been increased than I believe anyone anticipated,” Mr. Powell mentioned on Tuesday of latest inflation readings. “What that has advised us is that we’ll must be affected person and let restrictive coverage do its work.”

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

However, he mentioned, “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 should not anticipated, although not not possible. He mentioned 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 almost definitely consequence.

“It’s actually a query of maintaining coverage on the present fee for an extended time than had been thought,” Mr. Powell mentioned. “The query is: Is it sufficiently restrictive? And I believe that’s going to be a query that point must inform.”

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

He additionally famous that it could possibly 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 all-time low within the 2010s and in 2020.

“The U.S. financial system is totally different this time,” Mr. Powell mentioned.

Nonetheless, he mentioned repeatedly that he thought rates of interest have been excessive sufficient to step by step weigh on development and ultimately deliver inflation down the remainder of the best way.

“In the beginning, we have been very involved that the very excessive inflation we noticed could be fairly tough to deliver down with no very vital decline in employment and weakening financial exercise — that didn’t occur, that’s only a nice outcome,” Mr. Powell mentioned.

Despite the fact that inflation has come down considerably from its highs in 2022, Individuals are unhappy with the state of the financial system, a truth that’s clear in low shopper confidence ranges. Mr. Powell attributed that dissatisfaction to continued excessive value ranges.

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

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