ISTANBUL

US Federal Chair Jerome Powell said Wednesday he is "not ready" to declare victory over inflation, despite that it has fallen significantly in two years.

"I am not ready to say that yet," Powell said when he was asked after his testimony to the US House of Representatives Committee on Financial Services.

The Fed chair said he still believes the American economy is heading towards a soft landing -- a situation where a central bank raises interest rates too much and too high, leading to an economic slowdown but avoiding a recession.

"There is a path to getting back to full price stability while keeping the unemployment rate low. We're on it. We're very focused on staying on that path," he said.

Consumer inflation in the US annually rose 3.3% in May, which is a significant decline from the annual gain of 9.1% in summer of 2022.

To fight record inflation, which was the highest in almost 41 years, the Fed raised interest rates by a total of 525 basis points over the course of 11 meetings from March 2022 to July 2023.

The consumer inflation figures for June will be released Thursday at 8.30 a.m. EDT, and easing figures could pave the way for the Fed to start rate cuts in September.

"Our undertaking is to make decisions when and as they need to be made based on incoming (macroeconomic) data," Powell said. "We have a long history of doing that ... anything we do will be very well grounded."