Key takeaways from Fed Chair Powell's testimony

Federal Reserve Chair Jerome Powell testified before the House Financial Services Committee on Wednesday as part of his semiannual report to both chambers of Congress. He is set to appear before the Senate Banking Committee on Thursday.

Powell's testimony came just one week after the central bank paused its most aggressive rate-hiking campaign in decades. A few things that became clear: The Fed isn't done fighting inflation, the focus of new banking regulation will likely be on the biggest banks and the central bank remains attuned to its employment mandate.

Democrats repeatedly emphasized to Powell the Fed's mandate to achieve full employment, underscoring their fears of job losses if the central bank overdoes it. Meanwhile, questions from Republicans illustrated their concerns over forthcoming banking regulation. Powell doubled down on the hawkish view that the Fed isn't done battling inflation.

Here are some takeaways from Powell's testimony to House lawmakers.

The Fed held its key lending rate steady at a range of 5-5.25% in its latest meeting, but most officials hinted that two more quarter-point rate hikes might be necessary this year, according to the Fed's latest set of economic forecasts. Just days after the decision, two Fed officials called for more increases, citing persistent inflationary pressures. And on Wednesday, Powell told lawmakers it was a "pretty good guess" that the central bank would hike rates twice more this year.

Powell said "inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go," suggesting additional action from the Fed in the form of more rate hikes or at the very least holding rates steady. But he reassured lawmakers that the Fed's policy moves will continue to evolve as inflation approaches the central bank's target.

"Now we're moderating that pace, much as you might do if you were to be driving 75 miles an hour on a highway, then 50 miles an hour on a local highway, then as you get closer to your destination, you try to find that destination - you slow down even further," he said.