Federal Reserve Chair Jerome Powell said Tuesday that policymakers have been encouraged by recent data that suggests inflation is receding, and that continued progress would strengthen the case for an interest rate cut.  

"Incoming data for the first quarter of this year did not support such greater confidence. The most recent inflation readings, however, have shown some modest further progress, and more good data would strengthen our confidence that inflation is moving sustainably toward 2 percent," Powell said in remarks prepared for testimony before the Senate Banking Committee.

The Fed chief is on Capitol Hill for the first of two days of his semi-annual monetary policy testimony. He is slated to appear before the House Financial Services Committee on Wednesday.

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