The Fed has two main objectives: maintain maximum employment and contain inflation. Although one single data point is never decisive, when inflation is high, the Fed generally raises interest rates to slow demand. When the unemployment rate is high, the Fed often lowers interest rates to stimulate consumer activity.

Related: Despite interest rate cuts, mortgage rates rise for home buyers So it's happened this week. Both the Consumer Price Index and Producer Price Index reports showed small increases when many investors and economic experts were expecting flat results or declines.

"The economy is not sending any signals that we need to be in a hurry to lower rates," he said, calling the US economy's recent performance "by far the best of any major economy i

Federal Reserve Chair Jerome Powell said Thursday that the economy is in a good place, with inflation on a sustainable path back to the central bank’s 2% target, and that he expects inflation to continue to come down on a “sometimes bumpy” path.

A strong economy is giving Federal Reserve officials room to move “carefully” as they lower interest rates, the central bank chair said.

Federal Reserve Chair Jerome Powell said Thursday that interest rates are still expected to decline further, but suggested they might not be that much lower over the next few months.

Federal Reserve Chair Jerome Powell said the recent performance of the US economy has been “remarkably good,” giving central bankers room to lower interest rates at a careful pace.