WASHINGTON (Reuters) – Federal Reserve Chair Jerome Powell on Wednesday pledged “powerful support” to complete the U.S. economic recovery from the coronavirus pandemic, but faced sharp questions from Republican lawmakers concerned about recent spikes in inflation.

In testimony to the U.S. House of Representatives Financial Services Committee, Powell said he is confident recent price hikes are associated with the country’s post-pandemic reopening and will fade, and that the Fed should stay focused on getting as many people back to work as possible.

Any move to reduce support for the economy, by first slowing the U.S. central bank’s $120 billion in monthly bond purchases, is “still a ways off,” Powell said, with millions of people who were working before the crisis still to be pulled back into the labor force.

“The high inflation readings are for a small group of goods and services directly tied to the reopening,” Powell testified, language that indicated he saw no need to rush the shift towards post-pandemic policy.

Representative Ann Wagner, a Republican from Missouri, challenged that conclusion, relaying what’s likely to be a refrain from lawmakers as long as inflation continues to rise: their constituents are getting worried.

At a prior hearing in February “you reiterated that price spikes were temporary. I can tell you that the families and businesses I represent are not feeling that these price spikes are temporary,” Wagner said.

“The incoming data have been higher than expected and hoped for but are still consistent” with a temporary bout of higher prices, Powell responded.

“It is housing, appliances, food prices, gas,” Wagner retorted, a sign of what could become growing political pressure on the Fed to get tougher on inflation if the spikes in prices continue.

Representative Anthony Gonzalez, a Republican from Ohio, took aim at a new Fed framework that aims to encourage higher employment by letting inflation run “moderately” above the central bank’s 2% target “for some time”

“How long is ‘some time’?” Gonzalez asked, arguing that the Fed’s current policies may be doing little to encourage employment at a time when employers are already posting record numbers of jobs.

“It depends,” Powell said, demonstrating the dilemma he faces if prices continue rising. “Right now inflation is well above 2%. … The question for the (Federal Open Market) Committee will be where does this leave us in six months.”

U.S. Treasury yields fell after the release of Powell’s prepared testimony earlier on Wednesday and remained lower even though prices of factory inputs rose at a higher-than-expected pace in June, an indication markets construed his comments as a sign the monetary taps will stay open.

Powell’s remarks were notable as well for excluding any mention of risks to the recovery from the coronavirus Delta variant, with the Fed chief saying the central bank expects strong upcoming job gains “as public health conditions continue to improve.”

FILE PHOTO: Federal Reserve Chair Jerome Powell holds a news conference following the Federal Open Market Committee meeting in Washington, U.S., December 11, 2019. REUTERS/Joshua

(Adds Powell’s prepared testimony)

WASHINGTON, July 14 (Reuters) – U.S. monetary policy will offer “powerful support” to the economy “until the recovery is complete,” Federal Reserve Chair Jerome Powell said on Wednesday in remarks that portrayed a recent jump in inflation as temporary and focused on the need for continued job gains.

Any move to pull back support for the economy, by first slowing the U.S. central bank’s $120 billion in monthly bond purchases, is “still a ways off,” Powell said in comments prepared for delivery to the U.S. House of Representatives Financial Services Committee at 12 p.m. EDT (1600 GMT).

Despite recent job gains “there is still a long way to go” in pulling millions of people from the sidelines, many of them lower-wage, Black or Hispanic workers hit hardest by the recession triggered by the coronavirus pandemic, Powell said.

Addressing concerns that inflation posed new risks of its own, Powell said the pace of price increases “will likely remain elevated in coming months before moderating,” language that indicated he saw no need to rush the shift towards post-pandemic policy. Long-term inflation expectations, he said, remained consistent with the Fed’s 2% inflation target.

U.S. Treasury yields fell after the release of Powell’s prepared testimony even though prices of factory inputs rose at a higher-than-expected pace, an indication markets construed his comments as keeping the monetary taps open.

The remarks were notable as well for excluding any mention of the Delta variant of the coronavirus as a risk to the recovery, with Powell saying the Fed expects strong upcoming job gains “as public health conditions continue to improve.”

Powell is likely to be questioned about that issue as well as the Fed’s outlook on inflation, the labor market and the economic recovery during two days of testimony in Congress.

Powell appears before the U.S. Senate Banking Committee at 9:30 a.m. on Thursday.

Faster-than-anticipated inflation and a new rise in coronavirus infections due to the Delta variant pose a potential dilemma for Powell, pulling the outlook for policy in opposite directions.

The Fed’s June meeting saw officials begin a move towards post-pandemic policy, with some of them poised to tighten financial conditions sooner to ensure inflation remains contained. Renewed coronavirus-related risks, if they materialize, could push the Fed in the other direction of keeping support for the recovery in place longer in case household and business spending wanes amid a rise in new infections.

Falling Treasury bond yields have indicated concern among investors about slowing U.S. economic growth, even as new data on prices this week showed consumers paying appreciably more for an array of goods and services, including appliances, fabric, beef and rent.

In a report to Congress last week, the Fed said that as the “extraordinary circumstances” of the reopening subside, “supply and demand should become better aligned, and inflation is widely expected to move down.”

RISING DELTA

While each month of high inflation makes it harder to stick to that conviction, Powell for now is keeping to the

(Reuters) – The U.S. economy is at an “inflection point” with expectations that growth and hiring will pick up speed in the months ahead, but also risks if a hasty reopening leads to a continued increase in coronavirus cases, Federal Reserve Chair Jerome Powell said.

In an interview on the CBS news magazine “60 Minutes” that aired on Sunday night, Powell echoed both his recent optimism about the economy and a now-familiar warning that the COVID-19 pandemic had not yet been fully defeated.

“There really are risks out there. And the principal one just is that we will reopen too quickly, people will too quickly return to their old practices, and we’ll see another spike in cases,” Powell said in the interview, recorded on Wednesday.

The impact of vaccinations should mean any coming spike in cases is not as severe and does not have the same disastrous effects on public health and the economy as prior surges. But Powell said the economic recovery will still “move ahead more quickly to the extent we keep the spread of COVID under control.”

“It’s going to be smart if people can continue to socially distance and wear masks.”

Chairs of the U.S. Federal Reserve appear only rarely on widely-aired broadcast shows like “60 Minutes” though Powell has used that type of platform several times during the pandemic to explain Fed policy and, in the beginning, to try to calm fears about a full-on economic collapse.

A year later, data on the economy has been positive by and large, with a better-than-expected 916,000 jobs created in March and some Fed officials suggesting a run of a million new jobs a month is possible later this year.

FILE PHOTO: The Empire State Building and One World Trade Center rise above Manhattan as seen from an apartment in the Central Park Tower building as the building celebrates its topping out in New York, U.S. September 17, 2019. REUTERS/Lucas Jackson

Powell said the base case forecast is for “very strong” job growth in the months ahead, and that it is “in the range of possibility” for the U.S. to see “quick progress to maximum employment.”

Those hardest hit by the pandemic, including low wage workers in the service sector, could see their jobs return with relative haste in coming months as more and more activities are considered safe to resume, Powell said.

But Powell reiterated that the Fed is not about to change its current policy of near zero interest rates and bond purchases of $120 billion per month.

Officials intend to keep support for the economy in place until the recovery is largely complete, and “stick with those people and support them as they try to get back to where they were in life, which was working.”

While pockets of the United States are seeing an upswing in COVID-19 cases – in Michigan in particular – infection rates in large parts of the country are at multi-month lows, and the vaccine