Chair Jerome Powell said Thursday that the Federal Reserve will likely cut its key interest rate slowly and deliberately in the coming months, in part because inflation has shown signs of persistence and the Fed's officials want to see where it heads next.

Federal Reserve Chair Jerome Powell said Thursday that interest rates are still expected to decline further, but suggested they might not be that much lower over the next few months.

But if inflation continues to inch upward, the central bank may decide it needs to leave rates high to avoid a repeat of runaway inflation. Inflation peaked at 9.1% in June 2022 before slowly making its way back down closer to the Fed's target range of 2%.