Federal Reserve Chairman Jerome Powell said Monday that the central bank will not wait until inflation hits 2% to cut interest rates.

Speaking at the Economic Club of Washington, D.C., Powell referenced the idea that central bank policy works with “long and variable lags” to explain why the Fed would not wait for its target to be reached.

“What this implies is that if you wait until inflation comes down to 2%, you’ve probably waited too long, because the tightening you’re doing, or the level of tightening you’re doing, is still having effects that will likely push inflation below 2%,” Powell said.

Instead, the Fed is seeking “greater confidence” that inflation will return to the 2% level, Powell said.

“What’s adding to that confidence is more good inflation data, and we’ve been getting some of that lately,” he said.

Powell also said he believes a “hard landing” for the U.S. economy was “not a likely scenario.”

Monday was Powell’s first public appearance since the June consumer price index report showed inflation cooling, with prices actually falling month-over-month.

Powell said at the start of his appearance that he had no intention of giving any indication as to when the Fed might start cutting interest rates. The central bank’s next policy meeting is scheduled for late July.

Powell made the remarks as part of a discussion with David Rubenstein, president of the Economic Club of Washington, D.C., and co-founder of The Carlyle Group, where the Fed chairman previously worked.

The target range for the federal funds rate is currently 5.25% to 5.50%. This represents an increase from the 0% to 0.25% range during the Covid-19 pandemic, and from the 1.50% to 1.75% range before that health crisis.

The federal funds rate directly or indirectly influences the cost of money throughout the economy, such as mortgage rates.

“People I don’t know are always telling me, ‘Hey, rates need to be cut.’ Someone said that in the elevator this morning,” Powell said jokingly.