US Federal Reserve Chair Jerome Powell said the central bank is "not far from" starting to lower interest rates. 

"We’re waiting to become more confident that inflation is moving sustainably at 2 percent," US Federal Reserve Chair Jerome Powell told the US Senate Committee on Banking, Housing, and Urban Affairs during his testimony last week.

"When we do get that confidence, and we’re not far from it, it’ll be appropriate to begin to dial back the level of restriction," he added.

The Fed in its most recent meeting on January 31 kept its federal funds rate unchanged in the 5.25- to 5.5-percent target range, the highest level in 23 years. Powell, in his post-meeting remarks, said a rate cut is unlikely at its next meeting that will conclude on March 20.

"We believe that our policy rate is likely at its peak for this tightening cycle," he told the Senate. "But the economic outlook is uncertain, and ongoing progress toward our 2-percent inflation objective is not assured."

He added that reducing policy restraint too soon or too much could result in a reversal of the progress the US Federal Reserve has made in taming inflation.

“At the same time, reducing policy restraint too late or too little could unduly weaken economic activity and employment," Powell said.