Jerome H. Powell, the Federal Reserve chair, mentioned on Friday that inflation continues to be “far above” the central financial institution’s goal however mentioned policymakers “haven’t made any choices” about whether or not to lift charges at their subsequent assembly in June.

The feedback, made on the Fed’s annual Thomas Laubach Analysis Convention, got here as companies and traders around the globe try to gauge whether or not the Fed is making ready to pause its marketing campaign to lift borrowing prices amid indicators that inflation is easing and the U.S. economic system is cooling.

Mr. Powell didn’t provide a transparent sign on the trail of rates of interest, however mentioned the Fed stays dedicated to bringing inflation nearer to the central financial institution’s 2 % goal.

“The info continues to assist the committee’s view that bringing inflation down will take a while,” Mr. Powell mentioned.

Nonetheless, Mr. Powell did word that latest turmoil within the banking sector has prompted lenders to tug again on offering credit score, which can in all probability weigh on financial progress. That would scale back the necessity to increase rates of interest as excessive as they in any other case would must be lifted.

However Mr. Powell made clear that the Fed, which meets on June 13-14, has not but decided its subsequent transfer.

“Till very just lately, it’s been clear that additional coverage firming could be required,” Mr. Powell mentioned. “As coverage has develop into extra restrictive, the dangers of doing an excessive amount of versus too little have gotten extra balanced.”

He added: “So we haven’t made any choices concerning the extent to which extra coverage firming might be acceptable.”

The Fed has raised charges aggressively over the previous 12 months, bringing them above 5 % for the primary time in 15 years. Whereas inflation has confirmed indicators of moderating, it’s nonetheless far greater than the Fed — and shoppers — would love.

The 2-year Treasury yield, which is indicative of the place traders anticipate rates of interest to land, fell greater than 0.1 proportion factors after Mr. Powell’s feedback, having risen by roughly the identical quantity earlier than he spoke. That was a giant single-day swing for an asset that usually fluctuates by hundredths of a proportion level.

The S&P 500 slumped 0.8 % from its earlier excessive, earlier than a slight restoration to depart it buying and selling about 0.2 % decrease for the day, remaining heading in the right direction for a acquire of 1.6 % for the week.

Monetary markets have been additionally swayed by information elsewhere, together with lawmakers’ ongoing problem to resolve the debt ceiling disaster. Stories that Janet Yellen, U.S. Treasury secretary, just lately instructed financial institution chiefs that extra mergers could also be obligatory additionally appeared to spook traders.

Ms. Yellen’s feedback echoed remarks she made final week in Japan, the place she instructed Reuters, “This is perhaps an atmosphere through which we’re going to see extra mergers.”

Friday’s developments undid a few of traders’ expectations about future will increase in rates of interest, which had are available in response to earlier feedback from different policymakers.

The president of the Dallas Fed, Lorie Logan, mentioned this week that the present state of the economic system, primarily based on latest knowledge, leaves one other charge enhance in June a risk.

“The info in coming weeks might but present that it’s acceptable to skip a gathering,” Ms. Logan mentioned in a speech on Thursday. “As of immediately, although, we aren’t there but.”

In flip, the likelihood drawn from bets in rate of interest markets of an additional charge enhance subsequent month nudged greater this week, although expectations are nonetheless tilted towards the Fed holding rates of interest the place they’re.

As an alternative, traders have begun betting on the present degree of rates of interest remaining the place it’s for longer. That they had been beforehand pricing in a full quarter-point reduce to charges as quickly as September, and two subsequent quarter level cuts earlier than the tip of the 12 months. They’re now betting on two cuts to charges this 12 months, one every in November and December.