"If inflation started to tick back down or we saw some marked weakening in the labor market, then that might cause us to cut back on interest rates. Or, if we get convinced that inflation is entrenched at 3 percent and we need to go higher, we will do that."
Fed officials are increasingly voicing concern that high borrowing costs may not rein in demand, increasing anxiety that the central bank may raise rates further.
In his semiannual testimony before Congress, the Fed chair will hear from Democrats who want interest rate cuts to keep the economy humming and Republicans who want him to scrap capital requirement increases for big banks.
The odds of a March interest rate cut have ebbed significantly, as Fed officials push back against market expectations for imminent and deep reductions this year.
Chair Jerome Powell said this week: "Inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go."