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 12 months. However stubbornly speedy inflation in latest months has upended that plan.

Central bankers have been clear that charge cuts this 12 months 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 be sure that inflation is genuinely coming beneath management.

Talking throughout a panel dialogue in Amsterdam, Mr. Powell mentioned officers had been stunned by latest inflation readings. The Shopper Worth 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 12 months. The Fed’s most popular measure, the Private Consumption Expenditures index, is barely cooler, but it surely, too, stays properly above the Fed’s 2 p.c inflation aim.

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

Mr. Powell mentioned 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 mentioned, “my confidence in that’s not as excessive because it was, having seen these readings within the first three months of the 12 months.”

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

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

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

He additionally famous that it might 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 regularly weigh on progress and finally convey inflation down the remainder of the way in which.

“Originally, we have been very involved that the very excessive inflation we noticed is likely to be fairly tough to convey down with out a very vital decline in employment and weakening financial exercise — that didn’t occur, that’s only a nice consequence,” Mr. Powell mentioned.

Regardless 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 worth ranges.

As a result of inflation measures modifications in worth, slower inflation simply implies 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,’ and so they suppose, ‘I don’t perceive that,’” Mr. Powell mentioned. “Notably individuals on the decrease finish of the revenue spectrum are very arduous hit by inflation, from the beginning, which is why we’re so dedicated to restoring worth stability and conserving it in place.”