Federal Reserve Chair Jerome Powell will hint that the central bank could increase the pace of interest rate hikes if data indicate price pressures continuing, according to a prepared statement shared ahead of his congressional testimony on Tuesday. 

"If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes," he will say. "Restoring price stability will likely require that we maintain a restrictive stance of monetary policy for some time." 

Powell acknowledged that inflation has slowed since the middle of last year but remains above the FOMC committee's longer-run objective of 2 percent. He also noted that there has been "little sign of disinflation thus far in the category of core services excluding housing, which accounts for more than half of core consumer expenditures."

Bringing down inflation in core services will likely require softening in the labor market, according to the Federal Reserve chair. Powell noted that nominal wage gains have slowed recently, but remain "above what is consistent with 2 percent inflation and current trends in productivity."

Repeating a common refrain from the nation's top banker, he said, "Strong wage growth is good for workers but only if it is not eroded by inflation."

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