WASHINGTON (Reuters) - The Federal Reserve has "quite a ways to go" in trimming the size of its balance sheet with the endpoint of quantitative tightening still uncertain, Fed Chair Jerome Powell told the House Financial Services Committee on Wednesday.

The Fed has trimmed the size of its holding by about $1.7 trillion dollars already, Powell said, but will edge its way carefully to a stopping point in order to make sure financial institutions have access to adequate reserves.

"We have made quite a lot of progress," Powell said, but "we feel we have quite a ways to go."

The Fed bulked up its balance sheet in response to the COVID-19 pandemic to help suppress long-term interest rates and support the economy. It is currently letting as much as $25 billion per month of its holdings of U.S. Treasuries and $35 billion of mortgage-backed securities expire as they mature.

It was Powell's second day of testimony before the U.S. Congress, a semiannual exercise that includes a review of economic conditions and monetary policy and, typically, a grilling by lawmakers about regulatory and other issues as well.

As they did in a Tuesday hearing before the Senate Banking Committee, Republican lawmakers quizzed Powell about bank regulatory proposals that have drawn opposition from the industry and GOP officials.

Democrats tried to draw him out on issues like proposals by a Republican-aligned group, called Project 2025, to overhaul and potentially weaken the Fed.

Asked his views of the Fed's current congressionally established mandate to maintain both stables prices and full employment, Powell said he thought the current arrangement had served the Fed well. Some critics of the dual mandate feel the Fed should only focus on inflation.

The dual mandate "has been a good thing," Powell said, and has not prevented the Fed from doing what it needed to respond to rising prices.

Asked about a round of 2020 changes to the Fed's monetary policy strategy that allowed higher inflation to make up for periods of weak inflation, Powell said that was approved at a time when low rates seemed endemic.

Since then "the neutral interest rate must have moved up in the short term," Powell said, noting the "restrictive" benchmark interest rate, set in the range of 5.25% to 5.5% since July of 2023, being used to curb inflation.

His other comments on Tuesday tracked the Tuesday hearing in the Senate, showing both increased faith in a continued decline in inflation and a growing sensitivity about the risk of keeping monetary policy too tight for too long and slowing the economy more than necessary.

The U.S. unemployment rate is now 4.1%, a number Powell considers low by historical standards but which has been rising incrementally for a year. It is also above the level many economists and Fed officials feel represents sustainable full employment.

As he did on Tuesday, Powell told House members that "more good data" would build the case for the U.S. central bank to cut interest rates.