With food, housing and transportation prices increasing in the US, the Federal Reserve is committed to restoring price stability, even by raising interest rates more "aggressively," the central bank’s chairman said Monday.

Speaking at the National Association for Business Economics’ annual conference in Washington, D.C., Jerome Powell said overly high inflation is putting the country’s otherwise robust economic recovery in jeopardy, noting that the US labor market is very strong.

"There is an obvious need to move expeditiously to return the stance of monetary policy to a more neutral level and then to move to more restrictive levels if that is what is required to restore price stability," he underlined.

Touching on the Fed’s 25-basis-point interest rate hike last week, he said the Fed expects to begin reducing the size of its balance sheet at a coming meeting.

"These actions, along with the adjustments we have made since last fall, represent a substantial firming in the stance of policy with the intention of restoring price stability.

"We will take the necessary steps to ensure a return to price stability. In particular, if we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings, we will do so," he added.

Saying the inflation rate was below expectations in 2021 by reaching 5.5%, Powell said "forecasters widely underestimated the severity and persistence of supply-side frictions, which, when combined with strong demand, especially for durable goods, produced surprisingly high inflation."

He said the surge in goods demand and supply chain bottlenecks together increased goods prices dramatically.

Mentioning the Russia-Ukraine war's impacts, he said: "Russia is one of the world's largest producers of commodities, and Ukraine is a key producer of several commodities as well, including wheat and neon, which is used in the production of computer chips.

"There is no recent experience with significant market disruption across such a broad range of commodities."

Powell said in addition to direct impacts, the war will probably restrain economic activity abroad and cause new disruptions in supply chains.

Recalling the energy crisis in the 1970s, he said it was not a "happy story" and noted that the US is less oil intensive than in the 1970s but increases in oil prices have mixed effects on the economy such as lowering real household incomes.

Saying that the ultimate responsibility for price stability rests with the Fed, he added: "And if we determine that we need to tighten beyond common measures of neutral and into a more restrictive stance, we will do that as well."/aa