Federal Reserve Chairman Colin Powell said Tuesday that the Fed will not pre-emptively raise interest rates and will not raise interest rates for fear that the unemployment rate is too low.

Powell testified on "the Fed's response to the coronavirus pandemic" before the House of Representatives Special Subcommittee on Coronavirus crisis on Tuesday afternoon.

Powell said that the best way for the Fed to ease inequality is to focus on employment and will take measures to deal with the substandard unemployment rate. Labor supply and employment are expected to be good this year.

On the question of inflation, which is of general concern to the market, Powell is answering the question of "is 5% inflation acceptable?" When asked, he said that 5% inflation is of course unacceptable. He said "a sizeable part or all" of the price rise was the result of the reopening of the economy. The current rise does not reflect economic tightness, although it has lasted longer than he expected.

Powell reiterated that the Fed is prepared to use its tools if necessary to guide inflation back to 2%. Over time, those factors that affect inflation are expected to subside.

In a speech prepared for the hearing, Powell said US inflation had risen significantly in recent months, but it was expected to fall towards the Fed's target.

Powell also said in his speech that the COVID-19 epidemic still poses a risk to the economic outlook. Vaccination may continue to reduce the economic impact of the epidemic, but new strains remain one of the risks. He said the Fed will do everything it can to support the economy to complete the recovery.