In this Dec. 1, 2020 file photo, Chairman of the Federal Reserve Jerome Powell appears before the Senate Banking Committee on Capitol Hill in Washington. The Federal Reserve signaled Wednesday, June 16, 2021, that it may act sooner than previously planned to start dialing back the low-interest rate policies that have helped fuel a swift rebound from the pandemic recession but have also coincided with rising inflation. The Fed's policymakers forecast that they would raise their benchmark short-term rate, which influences many consumer and business loans, twice by late 2023. They had previously estimated that no rate hike would occur before 2024.

WASHINGTON — The Federal Reserve signaled Wednesday that it may act sooner than previously planned to start dialing back the low-interest-rate policies that have helped fuel a swift rebound from the pandemic recession but have also coincided with rising inflation.

The Fed’s policymakers forecast that they would raise their benchmark short-term rate — which affects many consumer and business rates, from mortgages to auto loans — twice by late 2023. They had previously estimated that no rate hike would occur before 2024.

But at a news conference after its latest policy meeting, Chair Jerome Powell sought to dispel any concerns that the Fed might be in a hurry to withdraw its economic support by making borrowing more expensive. The economy, Powell said, still hasn’t improved enough for the Fed to reduce the pace of its monthly purchases of Treasury and mortgage bonds. Those purchases have been intended to hold down long-term loan rates to encourage borrowing.

The Fed has said it will keep buying $120 billion a month in bonds until “substantial further progress” has been made toward its goals of maximum employment and inflation sustainably above 2%.

“We are a ways away from substantial further progress, we think,” Powell said Wednesday. “But we are making progress.”

In his remarks, Powell drew a mostly positive picture of the economy. The inflation spikes of the past two months, he said, will likely prove temporary, and hiring should accelerate through summer and into the fall as COVID-19 recedes further with increased vaccinations, schools and day care centers reopen, which will allow more parents to work, and supplemental federal aid for the jobless ends.