July 9 (UPI) — Federal Reserve Chair Jerome Powell told a Senate committee on Tuesday that, while the inflation remains higher than its benchmark, the Fed realizes holding rates at their current levels too long could harm the economy.

Powell, in prepared remarks to the Senate’s Banking, Housing and Urban Affairs Committee, said the board will not lower rates “until we have greater confidence that inflation is moving sustainably toward 2%.”

He said that, while inflation continued to be reduced, economic data over the first quarter did not support that inflation would continue to fall. He said the board would need more “good data” to move forward with cuts.

“We know that reducing policy restraints too soon or too much could stall or even reverse the progress we have seen on inflation,” Powell said. “Reducing policy restraints too late or too little could unduly weaken economic activity and employment.

“In considering adjustments to the target range for the federal funds rate, the committee will continue its practice of carefully assessing incoming data and their implications for the evolving outlook, the balance of risks, and the appropriate monetary policy.”

The Federal Reserve’s key interest rate has remained at a 23-year high for about a year but inflation has remained stubbornly above the 2% mark. The interest rate, which affects borrowing rates across the economy, has helped slow inflation last year, though it has made little progress in 2024.

Some senators called on Powell and the board to lower rates sooner than later.

“I’m concerned that if the Fed waits too long to lower rates, the Fed could undo the progress we’ve made on creating good paying jobs,” said committee chair Sen. Sherrod Brown, D-Ohio, according to CNBC.

“If unemployment trends upward, you must act immediately to protect American jobs. Workers have too much to lose if the Fed overshoots [its] inflation target and causes a completely unnecessary recession.”