10:35 AM EDT, 07/09/2024 (MT Newswires) -- Incoming data for Q1 didn't support greater confidence that inflation is moving sustainably toward 2%, Federal Reserve Chair Jerome Powell said Tuesday in a prepared testimony submitted to the US Congress.

Powell, who is testifying Tuesday before the Senate Banking Committee to discuss his semiannual monetary policy report, said in the prepared testimony that the Fed wouldn't cut interest rates until it has gained such greater confidence.

"The most recent inflation readings, however, have shown some modest further progress, and more good data would strengthen our confidence that inflation is moving sustainably" toward 2%, Powell said.

He said the Fed recognizes that reducing policy restraint "too soon or too much" could impede or even reverse the progress on inflation.

"At the same time, in light of the progress made both in lowering inflation and in cooling the labor market over the past two years, elevated inflation is not the only risk we face," Powell said. "Reducing policy restraint too late or too little could unduly weaken economic activity and employment."

He said the Fed will continue to carefully evaluate incoming data in considering rate adjustments.

Powell will also discuss the report before the House Financial Services Committee on Wednesday.