The U.S. Federal Reserve (Fed) will raise its benchmark short-term interest rate faster than expected, and high enough to restrain growth and hiring, if it decides that this would be necessary to slow rampaging inflation, its Chair Jerome Powell said Monday.

At their meeting last week, Fed officials raised their key rate for the first time in three years from near zero to a range of 0.25% to 0.5% and forecast that they would carry out six more quarter-point hikes this year.

The U.S. central bank must move "expeditiously" to bring too-high inflation to heel, Powell told a National Association for Business Economics conference, adding that it could use bigger-than-usual interest rate hikes if needed to do so.

"The labor market is very strong, and inflation is much too high," he said. "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."

If necessary, he said the Fed would be open to raising rates by a more aggressive half-point at multiple meetings and to push rates into "restrictive" territory that would limit growth. The Fed hasn’t increased its benchmark rate by a half-point since May 2000.

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

The Fed is under pressure from widespread criticism that it has reacted too slowly to a price spike that has catapulted inflation to four-decade highs.

At their meeting last week, Fed officials forecast that they would raise rates four additional times in 2023 and that inflation would slow to 2.7% by the end of that year.

Investors responded to Powell's remarks by pricing in a better-than-even chance of a half-percentage-point interest rate hike at the central bank's policy meeting in May.

Most of the policymakers see the short-term policy rate at 1.9% by the end of this year, a pace that could be achieved with quarter-percentage-point increases at each of their next six policy meetings.

By the end of next year, they expect the central bank's benchmark overnight interest rate to be at 2.8%, bringing borrowing costs to a level where they would actually start biting into growth.

Most Fed policymakers see the "neutral" level as somewhere between 2.25% and 2.5%.

At the same time, the policymakers projected that the economy would remain resilient enough to keep growing and that the unemployment rate would fall from its current level of 3.8% to 3.5%, matching a 50-year low reached before the pandemic.

Some economists argue that such a painless outcome – what they refer to as a "soft landing" – is unrealistic, given the challenges the economy faces, including the potential for deeper economic disruptions resulting from Russia's invasion of Ukraine.

The war has already raised the cost of oil, wheat, nickel and other vital commodities.

But Powell asserted that the Fed has achieved such soft landings before.

"I believe that the historical record provides some grounds for optimism," he said "Soft, or at least soft-ish, landings have been relatively common in U.S. monetary history."

Powell’s remarks followed a flurry of comments from officials concerning Fed policy since last week’s meeting, all pointing in a hawkish direction. ("Hawks" typically support higher interest rates to stave off inflation, while "doves" generally prefer lower rates to bolster hiring).

The U.S. unemployment rate currently is at 3.8% and per-person job vacancies are at a record high.

Inflation by the Fed's preferred gauge, however, is three times the central bank's 2% goal, pushed upward by snarled supply chains that have taken longer to fix than most had expected and that could get worse as China responds to new COVID-19 surges with fresh lockdowns.

Also on Monday, Raphael Bostic, president of the Federal Reserve Bank of Atlanta, said that controlling inflation "is the top concern that I have for 2022."

Bostic also said he expects the Fed will raise rates a total of six times this year, and twice more in 2023. That is a more dovish approach than most of his colleagues. But he emphasized that this was mostly because of the extreme uncertainty currently surrounding the economy. If more rate hikes were necessary to slow inflation, he would support them, he said.

"We've been in an emergency posture for a long time," Bostic said. "We're past that now from an economic perspective. We need to quickly get to neutral," he said, referring to a level of interest rates that neither encourages nor slows economic growth.

Adding to the pressure on prices, Russia's war in Ukraine is pushing up the cost of oil, threatening to move inflation even higher. The United States, now the world's biggest oil producer, is better able to withstand an oil shock now than in the 1970s, Powell noted.

Although the Fed in normal times would not likely tighten monetary policy to address what in the end may be a temporary spike in commodity prices, Powell said, "the risk is rising that an extended period of high inflation could push longer-term expectations uncomfortably higher."

Last year, the Fed repeatedly forecast that supply chain pressures would ease and then was repeatedly disappointed.

"As we set policy, we will be looking to actual progress on these issues and not assuming significant near-term supply-side relief," Powell said Monday.

Fed policymakers hope to rein in inflation without stomping on growth or sending unemployment back up, and their forecasts released last week suggest they see a path for that, with the median view for inflation falling to 2.3% by 2024 but unemployment still at 3.6%.

Powell said on Monday he expects inflation to fall to "near 2%" over the next three years, and that while a "soft landing" may not be straightforward, there is plenty of historical precedent.

"The economy is very strong and is well-positioned to handle tighter monetary policy," he said.