Federal Reserve Chairman Jerome Powell on Wednesday downplayed the recent string of high readings of inflation, telling Congress that price pressures will still likely abate.

On Tuesday, figures from the Bureau of Labor Statistics showed the Consumer Price Index increasing by 5.4% on a year-over-year basis in June, the fastest pace since August 2008. A read on producers also showed prices accelerating to the largest annual increase in over a decade, testing the Fed on its commitment to only let inflation “moderately” overshoot its 2% inflation target.

“Right now of course inflation is not moderately above 2%, it is well above 2%. It’s nothing like ‘moderately,’” Powell told the House Financial Services Committee in testimony on Wednesday.

But Powell said the question is whether or not inflation will move down six months from now, which remains his expectation.

“It will depend on the path of the economy, it really will,” he said.

Powell acknowledged that inflation data has come in higher than expected and did not rule out the possibility that those price pressures could be more persistent than expected.

Read more