Federal Reserve Chair Jerome Powell will tell Congress that it remains appropriate to raise interest rates at a gradual pace in 2018, according to prepared remarks released Tuesday morning.
Later today, Powell will testify to the House Financial Services Committee for the first time since replacing Janet Yellen as Chairman.
In Powell's view, the recent stock market correction will not convince the Fed to delay raising interest rates.
"At this point, we do not see these developments as weighing heavily on the outlook for economic activity, the labor market and inflation. Indeed, the economic outlook remains strong," Powell said.
"The robust job market should continue to support growth in household incomes and consumer spending, solid economic growth among our trading partners should lead to further gains in U.S. exports, and upbeat business sentiment and strong sales growth will likely continue to boost business investment."
Analysts say the outlook for interest rates has become somewhat murky. Some Fed member prefer agressive rate hikes to control inflation, while others want to keep rates on hold in order to preserve the economic recovery.
Powell's prepared remarks suggest the Fed will raise interest rates three times this year, as they projected in their most recent monetary policy statement.
"In gauging the appropriate path for monetary policy over the next few years, the FOMC will continue to strike a balance between avoiding an overheated economy and bringing PCE price inflation to 2% on a sustained basis," Powell will say today.
He will face a Q&A session from lawmakers at 10 am ET. As President Donald Trump's handpicked choice to lead the Fed, Powell is expected to enjoy a friendly reception from Republicans.