Jerome Powell has told the Senate Banking Committee that the Fed plans to keep its benchmark interest rates near zero until the U.S. reaches their economic goals.
He stated that the economy is a long way from their employment and inflation goals, and it is likely to take some time for substantial further progress to be achieved.
The Fed has targeted an annual inflation rate of 2 percent.
The figure was 1.4 percent in January of 2021.
He also noted the Fed's plan to continue buying Treasury bonds and mortgage-backed securities.
It is spending US$80 billion on Treasury bonds each month, as well as $40 billion to buy mortgages in order to hold down long-term interest rates.
Responding to raising market concerns over inflation, Powell said he doesn't see inflation as a threat, but the Fed has the tools to deal with it if it becomes one.
"Inflation dynamics do change over time, but they don't turn on a dime… If it turns out unwanted inflation pressures arise, and they're persistent, we have the tools to deal with that."
The Fed chairman's appearance before the Senate Banking Committee is to present the semi-annual monetary policy report.
The report provides the background for monetary policy decisions and explains the nation's economic development as well as future prospects.
The last time, the Fed chair gave his semi-annual monetary policy report was June last year. "
He is scheduled to stand before the House Financial Services Committee on Wednesday.
SEO Eunkyung, Arirang News.