On inflation, Powell said it &ldquo has increased notably and will likely remain elevated in coming months before moderating.&rdquo

But he stuck to his oft-stated belief that the current surge is temporary and will be offset as conditions return to normal. He stressed that much of the current price pressure comes from a few industries such as used cars that are sensitive to temporary conditions. Multiple members of the House committee pressed him on the current inflation trends.

&ldquo It&rsquo s all kind of the same story. It&rsquo s a shortage of semiconductors. There&rsquo s also very high demand for various reasons,&rdquo Powell said in response to a question from Rep. Madeleine Dean, R-Pa. &ldquo It&rsquo s just a perfect storm of high demand and low supply and it should pass. Unless we think there&rsquo s gonna be a multi-year, many-year shortage of used cars in the United States, we should look at this as temporary. We very much think that it is.&rdquo

Pushed during the hearing to explain what &ldquo substantial further progress&rdquo will mean, Powell said that in regards to employment &ldquo it&rsquo s a very difficult thing to be precise about.&rdquo

&ldquo It really is a very broad range of things,&rdquo he added. He said the Fed &ldquo will provide lots of notice&rdquo before it considers tightening policy.

Markets have been watching Fed communication for indications about when the central bank will begin tapering its minimum $120 billion a month in bond purchases as it keeps interest rates anchored near zero.

Powell noted that the two policy measures &ldquo along with our strong guidance on interest rates and on our balance sheet, will ensure that monetary policy will continue to deliver powerful support to the economy until the recovery is complete.&rdquo

The chair&rsquo s comments came as part of his mandated semiannual testimony to Congress on the state of monetary policy and the economy.
 

As he has in the past, Powell noted that the pandemic-related hit to the economy is falling on those least able to shoulder it.

&ldquo Conditions in the labor market have continued to improve, but there is still a long way to go,&rdquo he said. &ldquo Job gains should be strong in coming months as public health conditions continue to improve and as some of the other pandemic-related factors currently weighing them down diminish.&rdquo

While the unemployment rate has dropped to 5.9% from its pandemic high of 14.8%, the Fed is focused on an inclusive employment mandate across racial, gender and income groups.

&ldquo Despite substantial improvements for all racial and ethnic groups, the hardest-hit groups still have the most ground left to regain,&rdquo Powell said.