WASHINGTON

Federal Reserve Chair Jerome Powell said Wednesday that ongoing rate increases will be appropriate to bring down inflation in the US. 

"Over coming months, we will be looking for compelling evidence that inflation is moving down, consistent with inflation returning to 2%," Powell told the Senate Banking Committee on monetary policy. "We anticipate that ongoing rate increases will be appropriate; the pace of those changes will continue to depend on the incoming data and the evolving outlook for the economy.”

"At the Fed, we understand the hardship that high inflation is causing, we are strongly committed to bringing inflation back down and we're moving expeditiously to do so," he said in opening remarks.

Powell said the surge in crude oil prices and other commodities that resulted from Russia's military operation in Ukraine is boosting prices for gasoline and fuel and creating additional upward pressure on inflation and coronavirus-related lockdowns in China are likely to exacerbate ongoing supply chain disruptions.

"We are highly attentive to the risks that high inflation poses to both sides of our mandate. And we're strongly committed to returning inflation to our 2% objective," he said.

Powell said the Fed will make decisions to hike rates "meeting by meeting" and "inflation has obviously surprised to the upside over the past year, and further surprises could be in store."

When asked by Senator Elizabeth Warren if interest rates go too high, could it drive the US into a recession, he responded: "Certainly a possibility."

"It's not intended outcome at all," he continued. "And frankly, the events of the last few months around the world have made it more difficult for us to achieve what we want, which is 2% inflation and still a strong labor market."

Powell's comments came after the Fed made its steepest rate hike in 28 years last Wednesday, raising its benchmark interest rate by 75 basis points after a rate hike in May of 50 basis points and a hike in March of 25 basis points.

Annual consumer inflation in the US soared to 8.6% last month, its highest since December 1981.

Due to the Fed's aggressive monetary tightening, the dollar index soared to 105.78 points this month -- its highest since December 2002.