Powell: Rate hike moderation may come by December

STORY: While the Fed chief did not indicate his estimated "terminal rate," Powell said it is likely to be "somewhat higher" than the 4.6% indicated by policymakers in their September projections.

"We anticipate that ongoing increases will be appropriate. It seems to me likely that the ultimate level of rates will need to be somewhat higher than thought at the time of the September meeting and the summary of economic projections."

He said curing inflation "will require holding policy at a restrictive level for some time," a comment that appeared to lean against market expectations the U.S. central bank could begin cutting rates next year as the economy slows.

Powell noted that while goods inflation has been easing, the cost of housing is likely to continue to rise into next year, while key price measures for services remain high and the labor market tight.

The Fed's response to the fastest outbreak of U.S. inflation in 40 years has been a similarly abrupt increase in interest rates. With a half-percentage-point increase expected at its Dec. 13-14 meeting, the central bank will have lifted its overnight policy rate from near zero as of March to the 4.25%-4.50% range, the swiftest change in rates since former Fed Chair Paul Volcker was battling an even worse rise in prices.