"We're really going to be raising rates and getting expeditiously to levels that are more neutral and then that are actually tightening policy if that turns out to be appropriate once we get there," he said.
Markets are pricing in three half-point rate rises for the next three policy meetings leading up to July, with the central bank moving to quarter-point increases after that point so that the federal funds rate reaches 2.77 per cent by the end of the year.
Its current target range is 0.25 per cent to 0.50 per cent, a level reached in March after the Fed delivered its first rate increase since 2018.
"It's absolutely essential to restore price stability," Powell said at the panel, which also included Christine Lagarde, president of the European Central Bank, and Kristalina Georgieva, managing director of the IMF. "Economies don't work without price stability."
The Fed is also set to soon begin shrinking its US$9 trillion ($13.4t) balance sheet, aiming for a monthly reduction of as much as US$95 billion that is likely to officially kick off in June.
Lagarde suggested the ECB would be less aggressive than the Fed in acting to quell inflation, especially in light of mounting risks to the bloc's growth and the fact that price pressures in Europe broadly stem from supply-related constraints.
"It needs to be addressed in a sequential, flexible, gradual way, which is what we have begun doing," she said, with the ECB deciding in June at what point in the third quarter it will stop purchasing government bonds.
"That will then lead us to assess whether or not an interest [rate] hike is needed," Lagarde said.
She added: "For goodness sake, let's wait until we have the data and then we move on to decide."
Powell also pushed back on concerns that the effort to tighten monetary policy will result in a recession, pointing to the historically strong labour market, which he said was "unsustainably hot". But he acknowledged it would be difficult to achieve a so-called soft landing.
"I don't think you'll hear anyone at the Fed say that that's going to be straightforward or easy," he said. "It's going to be very challenging."
Written by: Colby Smith
© Financial Times