Politicians are doubling their efforts to lower inflation to the Fed’s 2% target, with officials lifting their benchmark rate from 5.25% to 5.5% last month.

The key is how long they keep them restrictive and how the economy does.

Economic output and consumer spending have been high, suggesting the economy may not be cooling as fast as projected.

Powell warned that further progress on inflation could put further tightening of monetary policy.

The central bank’s personal consumption expenditures price index climbed 3% in June, the slowest pace since early 2021.

Fed officials say they will keep rates in restrictive territory until they see signs of inflation approaching their 2% goal, but this is subjective and may lead to additional policymaker differences.