WASHINGTON — Federal Reserve Chairman Jerome Powell took a sharp and unexpected turn Tuesday toward tightening credit for consumers and businesses in the face of mounting concerns about high inflation.

Powell signaled that the Fed will likely act more quickly to phase out its ultra-low-interest rate policies even as the emergence of the new omicron variant of COVID-19 has raised fresh doubts about the future of the economy and the direction of inflation.

The Fed chairman told the Senate Banking Committee that the central bank’s policymakers will discuss at their next meeting in mid-December whether to accelerate the reduction of their monthly bond purchases, which have been intended to lower long-term borrowing costs. The Fed just announced those reductions in early November at a pace that would end the bond buying in June. But on Tuesday, Powell signaled that the Fed is inclined to end those purchases several months before then.

Doing so would put the Fed on a path to begin raising its key short-term interest rate as early as the first half of next year. That rate has been pegged at nearly zero since last March, when the coronavirus sent the economy into a deep recession. A higher Fed rate would, in turn, raise borrowing costs for mortgages, credit cards and some business loans.

Stock prices tumbled after Powell’s comments, and the Dow Jones Industrial Average lost more than 650 points, or nearly 2%, for the day. Very low interest rates, nurtured by the Fed, have been a key factor in driving share prices to all-time highs since the pandemic struck.

“He was decidedly more hawkish in tone than I expected and, I think, than the financial markets expected,” said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics. (Hawks generally favor higher borrowing costs to quell inflation, while doves typically emphasize lower rates to fuel hiring.)

Fed policymakers have come under pressure from a sharp jump in inflation, with consumer prices having soared 6.2% in October from a year earlier, the highest such inflation rate in 31 years. In response, some Fed officials in recent weeks had already started to push for a faster tapering of the central bank’s bond purchases.

Yet the sudden emergence of the omicron variant had led some Fed-watchers to speculate that the central bank would avoid any major policy shifts until a clearer picture of the variant and its likely impact on the economy emerged.

But Powell’s remarks Tuesday — and the questions he faced from senators — were far more focused on inflation than on the likelihood that omicron, about which little is known, could seriously weaken the economy.

“The economy is very strong, and inflationary pressures are high,” Powell said. “It is therefore appropriate, in my view, to consider wrapping up the taper of our asset purchases ... perhaps a few months sooner.”