Powell's remarks came at a press conference following the Fed's Open Market Committee meeting, which kept interest rates steady with another increase expected later in the year.

Powell stressed that the US Federal Reserve is strongly committed to returning inflation to the 2 percent level, but noted that this process has a long way to go.

The head of the US Federal Reserve noted that the country's economic growth was stronger than expected, which requires high interest rates. He also expected the recovery in the U.S. employment market to continue.

Decision in line with expectations

The US Federal Reserve kept interest rates at a 22-year high on Wednesday, but hardened its stance on monetary tightening, as it is expected to raise interest rates again by the end of the year and tighten monetary policy until 2024 more than previously expected.

As they did in June, central bank policymakers expect on average the benchmark overnight interest rate to peak this year in a range of 5.50-5.75 percent, a quarter of a percentage point above the current range.

But the central bank's updated quarterly forecast suggests interest rates will fall only half a percentage point in 2024 compared to expectations of a full percentage point drop during the central bank's June meeting.

The Federal Open Market Committee, which sets interest rates, said in a statement that "inflation remains high." The statement included forecasts of stronger economic growth and job growth than previously forecasts, keeping in mind the prospects for a "soft landing" of the economy.

Not a business plan

Powell warned that the central bank's new forecast, which shows tightening in monetary policy will remain longer, is not an action plan.

Regarding the new interest rate forecast, he said, "I don't want to label it really a plan," but instead reflect officials' view that the economy will perform better than they expected a few months ago.

Powell said he would not give any indication in his answers today about when the rate cut will begin, adding: "The time will come when it will be appropriate to start cutting rates."

After raising interest rates 11 times since March last year, inflation has fallen sharply but is still above the Federal Reserve's target of 2 percent a year, keeping pressure on officials to consider further action.

"Smooth landing"

Powell said there is a good chance that strong interest rate hikes will not push the U.S. economy into recession even though things are beyond the central bank's control.

"I always think a smooth landing is a possible prediction." He said his forecasts remained valid, but warned that other factors could affect the central bank's outlook.

Expectations of better growth and lower unemployment by bank officials point to confidence that the economy will withstand interest rate hikes without suffering too much.