Federal Reserve Chair Jerome Powell signaled policymakers could potentially raise interest rates in July and September to curb persistent price pressures and cool a surprisingly resilient US labor market.

Asked whether Fed officials now anticipate they will raise rates every other meeting after skipping a hike this month, Powell said that may or may not happen and that he wouldn’t rule out consecutive rate hikes. He reiterated that most policymakers’ forecasts show they expect to hike at least two more times this year.

“Although policy is restrictive it may not be restrictive enough and it has not been restrictive for long enough,” Powell said Wednesday during a panel hosted by the European Central Bank for a forum in Sintra, Portugal.

Read More: Top Central Bankers See Further Tightening to Counter Inflation

The Fed chief spoke two weeks after he and his colleagues left interest rates steady after 15 months of increases to allow more time to evaluate how higher borrowing costs and recent banking strains are hitting the economy.

But Powell and most of his colleagues are signaling more tightening will ultimately be needed to rein in an inflation rate running twice as high as the Fed’s 2% target. Median projections released at this month’s meeting showed Fed officials expect their benchmark rate to rise by another half point this year from the current range of 5% to 5.25%.

Markets boosted bets on future Fed hikes this year after Powell’s remarks.

A flurry of data released Tuesday pointed to a US economy that is exceeding expectations and proving resilient to the Fed’s tightening campaign. Reports showed that sales of new homes climbed to the fastest pace in over a year, durable goods orders topped estimates and consumer confidence hit the highest level since the start of 2022.

Powell said Wednesday the data is still consistent with an economy that is resilient and growing. While there’s a significant probability of an economic downturn, the Fed chief said, he does not view a recession as the most likely outcome.

Supply chain disruptions are improving and headline inflation is coming down, helping to keep expectations well-anchored, he said. But some categories of inflation, particularly in the services sector, aren’t showing much sign of progress.

Powell’s comments on inflation were largely echoed by Bank of England Governor Andrew Bailey and European Central Bank President Christine Lagarde, both of whom appeared on the panel and said further rate increases may be needed if underlying inflationary pressures persist.

Lagarde, responding to a question about pausing rate hikes, said that’s “not what we’re considering at the moment.”

“We know we have ground to cover,” Lagarde said.

(Updates with market reaction and Powell comments starting in sixth paragraph.)