The U.S. central bank is prepared to raise interest rates by bigger steps than the quarter-point hike announced last week if needed to contain "much too high" inflation, Federal Reserve Chair Jerome Powell said Monday.

Consumer prices in the world's largest economy have surged to the highest seen in four decades, and the Fed last week raised the benchmark lending rate for the first time since the COVID-19 pandemic began to try to tamp down inflation pressures.

"If we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings, we will do so," he said in a speech to an economics conference.

Inflation was already rising before the Russian-Ukraine conflict added to new price pressures and supply chain impediments that could spill over to the U.S. economy, he told the National Association for Business Economics.

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Russia-Ukraine conflict may worsen U.S. inflation

"There is an obvious need to move expeditiously" to remove the stimulus the Fed provided to the American economy during the pandemic, but Powell said central bankers are prepared to go beyond "neutral" and tighten policy if needed to achieve their goal.

Last week's rate hike was billed as the first in a series, and several policymakers have expressed willingness – or the need – to move in bigger steps.

"We are committed to restoring price stability while preserving a strong labor market," Powell said.

Fed policymakers hope to rein in inflation without stomping on growth or sending unemployment back up, and their forecasts released last week suggest they see a path for that, with the median view for inflation falling to 2.3 percent by 2024 but unemployment still at 3.6 percent.

Powell said he expects inflation to fall to "near 2 percent" over the next three years, and that while a "soft landing" may not be straightforward, there is plenty of historical precedent.

Even with the oil price shock sparked by the conflict in Ukraine, he noted that "today the economy is very strong and is well positioned to handle tighter monetary policy."

It is a difficult trick to finesse, analysts said.

Powell was "reasonably forthcoming that there's uncertainty," said Seth Carpenter, chief global economist at Morgan Stanley. "If you keep going until you see the outcome that you desire, chances are you've gone too far."

(With input from AFP and Reuters)