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As part of a mandatory appearance before Congress, Federal Reserve Chairman Jerome Powell foreshadowed interest rate hikes and noted that the effect of the Ukraine war on the U.S. economy remains uncertain, according to CNBC.

Interest rate hikes: Powell said he plans to start raising benchmark interest rates to protect against rising inflation. He added that the Fed will also begin reducing its bond holdings.

The path for rate hikes: Powell indicated the rate hikes will likely be done by quarter percentage point increases but kept the door open for more aggressive hikes if inflation rates continue to rise.

Powell on Ukraine: On Ukraine, Powell said, “The near-term effects on the U.S. economy of the invasion of Ukraine, the ongoing war, the sanctions, and of events to come, remain highly uncertain. Making appropriate monetary policy in this environment requires a recognition that the economy evolves in unexpected ways. We will need to be nimble in responding to incoming data and the evolving outlook.”

Inflation expected to fall: Powell said he expects inflation rates to decrease this year as supply chain issues are resolved. Inflation in the U.S. currently sits at a 40-year high, and consumer prices were up 7.5% in January from a year earlier.