Referring to former Fed chair Paul Volcker's battle against inflation in the early 1980s, when Fed policy triggered a recession and the unemployment rate topped 10%, Powell said in comments at a Cato Institute conference Volcker was trying to uproot years of rising inflation expectations. Volcker "followed several failed attempts," to lower inflation, Powell said.

"My colleagues and I are strongly committed (to lowering inflation)...We think we can avoid the kind of very high social costs that Paul Volcker and the Fed had to bring into play."