"We will not raise interest rates pre-emptively because we fear the possible onset of inflation. We will wait for evidence of actual inflation or other imbalances," Powell said in a hearing before a U.S. House of Representatives panel.
Recent price increases have pushed the consumer price index to a 13-year high, prompting Republicans on the committee to offer charts detailing spikes in consumer items like bacon and used cars to suggest price increases are getting out of hand.
The recent high inflation readings, however, "don't speak to a broadly tight economy" that would require higher interest rates, Powell said, referring to a "perfect storm" of rising demand for goods and services and bottlenecks in supplying them as the economy reopens from the pandemic.
Those price pressures should ease on their own, Powell said.