(WASHINGTON) — U.S. Federal Reserve Chair Jerome Powell told reporters Wednesday that the Fed staff no longer forecasts a recession for the U.S., and there is a chance inflation could return to target without high job losses.

In April, the Federal Reserve staff expected the regional bank crisis to tip the economy into recession, according to a Fed minutes release. Powell indicated during his news conference with reporters that the spring prediction may not be the case.

“The staff now has a noticeable slowdown in growth starting later this year in the forecast, but given the resilience of the economy recently, they are no longer forecasting a recession,” he said.

The Fed staff is an independent staff within the Federal Reserve that makes its own projections on the economy. Their forecasts are not the official position of the Federal Open Market Committee, the body that determines rate hike decisions.

Earlier in the day, the Federal Reserve raised its benchmark interest rate another 0.25% to a 22-year high of between 5.25% and 5.5%.

The central bank left its benchmark interest rate unchanged in June, ending a string of 10 consecutive rate increases that stretched back to March 2020.

Powell said the impacts of the current hikes are still working through the economy, and he could not use the word “optimism” to describe the trajectory of the economy.

Powell did leave the door open to more rate hikes saying they will react to the data. He pointed out that there will be two jobs’ reports and two inflation reports before the next Fed decision.

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