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Interest rates are likely to climb beyond bank policymakers’ initial expectations, Federal Reserve Chairman Jerome Powell said Tuesday, according to CNBC.

What’s going on: “‘The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,’ Powell said in remarks prepared for two appearances this week on Capitol Hill. ‘If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.’”

• The Fed has raised interest rates eight times in the past year.

What it means: Powell’s remarks mean that the peak, or terminal, level of the federal funds rate—which current market pricing puts in the 5.25%–5.50% range—will probably be higher than the Fed previously indicated.

• They also suggest that “the switch last month to a smaller quarter-percentage point increase could be short-lived if inflation data continue to run hot.”

What’s next: “‘Restoring price stability will likely require that we maintain a restrictive stance of monetary policy for some time,’ Powell said. ‘The historical record cautions strongly against prematurely loosening policy. We will stay the course until the job is done.’”

• During Powell’s comments, the markets anticipated a full half-point interest-rate raise at the Federal Open Market Committee meeting later this month.