Fed chair suggests rate hikes may slow due to bank stress

US Federal Reserve Chair Jerome Powell has indicated that key interest rates may not need to rise much further because of a recent series of bank failures in the country.

Powell spoke with former Fed chief Ben Bernanke and others at a conference in Washington on Friday.

Powell said the Fed's unprecedented decision to supply funds to financial institutions in the wake of the bank collapses was intended to "calm conditions in the banking sector," while continuing with rate hikes to curb inflation.

But he said developments in the sector "are contributing to tighter credit conditions and are likely to weigh on economic growth, hiring and inflation."

He added, "As a result, our policy rate may not need to rise as much as it would have otherwise to achieve our goals."

Powell said, however, inflation continues to be far above the Fed's target, adding that policymakers haven't made any decisions for their next meeting in June. He stressed that it will depend on upcoming economic data.

Some financial market participants took his remarks as an indication that the Fed may decide to suspend rate hikes at next month's meeting.