Washington (AFP) - The US Federal Reserve's progress in bringing down inflation is "not assured," the chairman said Wednesday on the first of two days of hearings in Congress.

"If the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year," Fed chief Jerome Powell told the House Financial Services Committee. 

"But the economic outlook is uncertain, and ongoing progress toward our two percent inflation objective is not assured," he added.

The Fed has raised its key lending rate to a 23-year high to tackle stubborn inflation, successfully bringing the rate of price increases down from multi-decade highs toward its long-run target of two percent. 

But inflation remains elevated, while the labor market and economic growth have proven to be surprisingly resilient to higher interest rates, which suggests that the Fed's road to two percent could be a bumpy one.

Powell on the Hill

Powell's comments kicked off two days of planned hearings in the House and Senate, in which he will be grilled about when the Fed will start cutting elevated interest rates, and its proposals for regulating US banks.

The hearings were convened to discuss the Fed's semi-annual Monetary Policy Report, which was published last week. 

In December, Fed policymakers penciled in three rate cuts this year, but did not indicate the timing of those cuts. 

In the months since, policymakers have pushed back against market expectations of an early rate cut, warning against moving too quickly and allowing inflation to reignite.

In his remarks on Capitol Hill, Powell said the Fed's rate-setting committee "does not expect that it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward two percent."

"We remain committed to bringing inflation back down," he continued, adding that policymakers still "want to see a little bit more data."

Futures traders have assigned a probability of just over 70 percent that the Federal Reserve will have begun cutting interest rates by mid-June, according to data from CME Group. 

Powell was also questioned Wednesday about proposed changes to banking regulation, which some members of the Fed's own board of governors have criticized as unnecessarily tough. 

Powell told lawmakers the Fed is "carefully analyzing" the "voluminous" responses to its proposals, which include plans to require banks with more than $100 billion in assets to increase the amount of capital they hold. 

"I do expect that there will be broad and material changes to the proposal," he said. 

'More work to do'

More than 2,000 miles away from Washington, in Portland, Oregon, Powell's colleague on the Fed's rate-setting committee struck a strikingly similar tone when discussing the likely path of monetary policy. 

"What we have to do is make sure that we bring inflation down to two percent as gently as we can," San Francisco Fed president Mary Daly told an event in the city. 

Daly, who is a voting member of the committee this year, said policymakers should not be "getting ahead of ourselves in declaring victory," adding: "we're not there yet."

"Policy is in a good place. The economy is in a good place. There is more work to do," she said.