03:37 PM EDT, 04/03/2024 (MT Newswires) -- Most policymakers expect that it would be appropriate to start reducing interest rates at some point in 2024, though more evidence is needed that inflation is easing, Federal Reserve Chair Jerome Powell said Wednesday.

Last month, the central bank's Federal Open Market Committee kept its benchmark lending rate unchanged at 5.25% to 5.50%, its fifth straight pause, and maintained expectations for three cuts this year. In a bid to combat inflation, policymakers started tightening monetary policy in March 2022, with their last rate hike coming in July 2023.

"If the economy evolves broadly as we expect, most FOMC participants see it as likely to be appropriate to begin lowering the policy rate at some point this year," Powell said in remarks prepared for a speech in Stanford, California. Inflation has cooled substantially over the last 12 months, but is still running above policymakers' 2% target, Powell said. Recent data on both prices and job gains have come in higher than projected, though it's too soon to say whether the recent inflation prints represent "more than just a bump," he added.

"We do not expect that it will be appropriate to lower our policy rate until we have greater confidence that inflation is moving sustainably down toward 2%," Powell said, echoing remarks contained in the FOMC's most recent policy decision statement. "Given the strength of the economy and progress on inflation so far, we have time to let the incoming data guide our decisions on policy."

Markets are widely expecting that the FOMC will hold interest rates steady in May, while the odds of a 25-basis-cut in June currently stand at roughly 62%, according to the CME FedWatch Tool.

Powell said the macro outlook remained "quite uncertain" and posed risks. "Reducing rates too soon or too much could result in a reversal of the progress we have seen on inflation and ultimately require even tighter policy to get inflation back to 2%," he said. "Easing policy too late or too little could unduly weaken economic activity and employment."

Separately, Atlanta Fed President Raphael Bostic indicated Wednesday that he saw only one rate cut in 2024, possibly coming in the fourth quarter, according to media reports.

"If the economy evolves as I expect, and that's going to be seeing continued robustness in (gross domestic product), unemployment and a slow decline of inflation through the course of the year, I think it would be appropriate for us to do start moving down at the end of this year, the fourth quarter," Bostic -- an FOMC voting member this year -- reportedly said. "We'll just have to see where the data come in."

On Tuesday, San Francisco Fed President Mary Daly said three cuts was likely "a very reasonable baseline." However, she added that three cuts was a projection and "not a promise." Separately, Cleveland Fed President Loretta Mester said progress on inflation should continue this year but the disinflation process may be choppy.