In his testimony before the House Financial Services Committee, Federal Reserve Chair Jerome Powell reinforced the uncertainty surrounding inflation trends while affirming the central bank's intent to potentially lower its benchmark interest rate later in the year.

Powell said that despite progress, sustained advancement towards the Fed's 2 per cent inflation target is not guaranteed. The remarks came amid a delicate balance between avoiding premature rate cuts and preventing a resurgence of inflation, against the backdrop of a charged presidential election year.

While acknowledging the recent easing of inflation from its 2022 highs, Powell stressed on the necessity for greater confidence in its continued decline before considering rate reductions. He highlighted divergent views among analysts and investors regarding the trajectory of inflation, with expectations of rate cuts looming as a pivotal decision point for the economy.

Powell's testimony reflects a nuanced approach to rate cuts, with careful consideration of economic data and potential implications on inflation dynamics. His strategic engagement with lawmakers from both political aisles underscores the importance of bipartisan consensus in shaping monetary policy decisions.

(With Reuters inputs)