Federal Reserve Chair Jerome Powell said Tuesday that policymakers have made "quite a bit" of progress on fighting inflation, but that he needs to see more evidence before starting to reduce interest rates.

Speaking during a central bank forum in Sintra, Portugal, Powell said that inflation reports from April and May signal price pressures are fading from the economy – and that the Fed wants that progress to continue.

"I think the last reading, and the one before it to a lesser extent, do suggest that we are getting back on a disinflationary path," he said. "We want to be more confident that inflation is moving sustainably down to 2% before we start the process of loosening policy."

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