"Inflation has obviously surprised to the upside over the past year, and further surprises could be in store. We therefore will need to be nimble in responding to incoming data and the evolving outlook," he said.
Mr. Powell's remarks reinforced comments at a news conference last week after he and his colleagues on the Federal Open Market Committee raised their benchmark lending rate 75 basis points — the biggest increase since 1994 — to a range of 1.5% to 1.75%.
While Mr. Powell told reporters then that another 75-basis-point increase, or a 50-basis-point move, was on the table for the next meeting in late July, Wednesday's text made no reference to the size of future rate hikes. Fed Governor Christopher J. Waller said June 18 that he would support a 75-basis-point rate increase in July should economic data come in as he expects.
"We understand the hardship high inflation is causing," Mr. Powell said Wednesday. "We are strongly committed to bringing inflation back down, and we are moving expeditiously to do so."
Investors expect the U.S. central bank to keep raising rates to a peak of about 3.6% by the middle of next year, according to interest-rate futures.
"Financial conditions have tightened and priced in a string of rate increases and that's appropriate," Mr. Powell said in response to a question following his opening remarks. "We need to go ahead and have them."
The Labor Department's consumer price index rose 8.6% last month from a year earlier, a four-decade high. University of Michigan data showed U.S. households expect inflation of 3.3% over the next five to 10 years, the most since 2008 and up from 3% in May.
The rising cost of living has angered Americans and hurt the standing of President Joe Biden's Democrats with voters ahead of November congressional midterm elections.
Mr. Powell heard sharp criticism of his performance on inflation, especially from Republicans, with Alabama Sen. Richard Shelby telling him that "the Federal Reserve failed the American people."
Fed officials have admitted that they were too slow to tighten and are now trying to front-load rate increases in the most aggressive policy pivot in decades.
While a recession isn't in the Fed's forecast, economists are increasingly flagging the likelihood of a downturn sometime in the next two years.
Former New York Fed President Bill Dudley said in a Bloomberg Opinion column Wednesday that a recession is "inevitable" within the next 12 to 18 months. An economist at the Fed, Michael Kiley, said in a paper Tuesday that the risk of a large increase in the unemployment rate is above 50% over the next four quarters, based on a simulation incorporating inflation data, unemployment, corporate bond yields and Treasury yields.
"The American economy is very strong and well positioned to handle tighter monetary policy," Mr. Powell said in his opening remarks.
While he said he did not see the likelihood of a recession as particularly elevated right now, he said that it was "certainly a possibility. It is not our intended outcome at all," noting that events in the past few months have made it harder for the Fed to lower inflation while sustaining a strong labor market.
A soft landing "is our goal. It is going to be very challenging. It has been made significantly more challenging by the events of the last few months — thinking there of the war and of commodities prices and further problems with supply chains."
Concern over the outlook for global growth has seen oil prices ease back somewhat in the past few days, potentially providing some relief to sky-high gasoline prices. At the same time, U.S. hiring remains strong and consumption indicators suggest demand is holding up despite the blow to real disposable income from higher inflation.
Mr. Powell called the labor market "extremely tight."
"The tightening in financial conditions that we have seen in recent months should continue to temper growth and help bring demand into better balance with supply," he said.
