WASHINGTON (NEXSTAR) -- Federal Reserve Chairman Jerome Powell told lawmakers on Wednesday that while inflation has cooled considerably in recent months, the central bank isn’t ready to cut rates yet.

Powell said the central bank’s policy-setting committee “would like to see more data” that makes them more confident that inflation is moving down to their 2% target.

“When we reach that confidence, the expectation is we will do so sometime this year, we can then begin dialing back,” Powell said.

Powell says he does expect the Fed to start dialing back interest rates in 2024 but warns that making the decision too soon could have huge financial risks.

“It's more important that we get this right than that we do it fast,” Powell said.

Rep. Maxine Waters (D-Calif.) says while she is pleased with the progress the Fed has made to bring down inflation, she says she is still concerned about the high cost of housing.

“Until we address the underlying housing supply shortage, Americans will continue to pay an increasing share of their income on housing, the affordability crisis will worsen, and inflation will remain too high,” Waters said.

Powell also dismissed lawmakers concerns that the added caution to cut rates means the U.S. is at risk of a recession.

“There's no evidence or no reason to think that the U.S. economy is in some kind of short-term risk of falling into recession,” Powell said.

Powell is scheduled to testify before the Senate Banking Committee on Thursday.