Federal Reserve Chair Jerome Powell kicked off his semiannual update to Congress on Tuesday, appearing before the Senate Banking Committee. He will appear before the House Financial Services Committee tomorrow.

Yahoo Finance's Jennifer Schonberger has the story:

Powell indicated the central bank is inching closer to feeling comfortable about interest rate cuts, saying that he was encouraged by evidence of cooler inflation and that more "good data" would help get the Fed to where it wants to be.

The inflation numbers "have shown some modest further progress" after some hotter readings in the first quarter, "and more good data would strengthen our confidence that inflation is moving sustainably toward 2 percent,” he said in prepared testimony before US lawmakers Tuesday.

It is the second time in the last week Powell has offered optimism about the inflation picture. Last Tuesday he noted that the last two inflation readings from April and May "do suggest that we are getting back on a disinflationary path."

The next reading on inflation as measured by the Consumer Price Index is due out Thursday.

It isn’t expected to show inflation getting worse, but it also isn’t expected drop either. Based on “core” CPI — which excludes volatile food and energy prices the Fed can’t control — inflation is expected to hold steady at 3.4% in June from the same level in May.

Powell noted in his prepared testimony the Fed will continue to make decisions on monetary policy meeting by meeting. He reiterated that lowering rates too quickly could reverse progress on bringing inflation down, while keeping rates elevated for too long could weaken the economy and the job market.

Democrats are expected to press Powell to lower rates soon, while Republicans are likely to press Powell on bank capital rules and emphasize that rates shouldn't be cut too close to the election in November.

Powell in his testimony underscored that Congress has entrusted the Fed with the operational independence that is needed to take a “longer-term perspective” in the pursuit of its dual mandate of maximum employment and stable prices.