WASHINGTON (AP) — Inflation in the United States is slowing again after higher readings earlier this year, Federal Reserve Chair Jerome Powell said Tuesday, while adding that more such evidence would be needed before the Fed would cut interest rates.

After some persistently high inflation reports at the start of 2024, Powell said, the data for April and May "do suggest we are getting back on a disinflationary path."

Speaking in a panel discussion at the European Central Bank's monetary policy conference in Sintra, Portugal, Powell said Fed officials still want to see annual price growth slow further toward their 2% target before they would feel confident of having fully defeated high inflation.

"We just want to understand that the levels that we're seeing are a true reading of underlying inflation," he added.

Powell also acknowledged that the Fed is treading a fine line as it weighs when to cut its benchmark interest rate, which it raised 11 times from March 2022 through July 2023 to its current level of 5.3%. The rate hikes were intended to curb the worst streak of inflation in four decades by slowing borrowing and spending by consumers and businesses. Inflation did tumble from its peak in 2022 yet still remains elevated.

If the Fed cuts rates too soon, Powell cautioned, inflation could re-accelerate, forcing the policymakers to reverse course and impose punishing rate hikes. But if the Fed waits too long to reduce borrowing costs, it risks weakening the economy so much as to potentially cause a recession.

"Getting the balance on monetary policy right during this critical period — that's really what I think about in the wee hours," Powell said in response to a question about his top worries.

On Friday, the government reported that consumer prices, according to the Fed's preferred measure, were unchanged from April to May, the mildest such reading in more than four years. And compared with a year earlier, inflation dropped to just 2.6% in May, from 2.7% in April, the government said.

Excluding volatile food and energy costs, "core" prices also barely rose from April to May. On a year-over-year basis, core inflation fell to 2.6% from 2.8% in April. The latest inflation figures were a sharp improvement from early this year.

In his appearance Tuesday, Powell said the U.S. economy and job market remain fundamentally healthy, which means the Fed can take its time in deciding when rate cuts are appropriate. Most economists think the Fed's first rate cut will occur in September, with potentially another cut to follow by year's end.

The Fed chair also said the job market is "cooling off appropriately," which likely means that it won't heighten inflationary pressures through rapid wage gains.

"It doesn't look like it's heating up or presenting a big problem for inflation going forward," Powell said of the job market. "It looks like it's doing just what you would want it to do, which is to cool off over time."

Powell declined to signal any time frame for a rate cut. Investors are betting that there is nearly a 70% chance for a reduction at the Fed's meeting in September.

Fed officials have expressed a range of views on inflation and interest-rate policy since their last meeting a little over two weeks ago.

John Williams, president of the Federal Reserve Bank of New York and vice chair of the central bank's rate-setting committee, said last week, "I am confident that we at the Fed are on a path to achieving our 2% inflation goal on a sustained basis."

Mary Daly, president of the San Francisco Fed, cautioned last week, though, that it was "hard to know if we are truly on track to sustainable price stability."

In his appearance Tuesday in Portugal, Powell spoke at a panel along with Christine Lagarde, president of the European Central Bank, and Roberto Campos Neto, the head of Brazil's central bank.

The ECB has already made a quarter-point cut to its key rate this year, with inflation in the 20-nation eurozone having sunk from above 10% to just 2.5%.

In her remarks Tuesday, though, Lagarde reiterated that the ECB is not on any "predetermined path" and that its recent rate cut "would be followed by further review of data."

Such comments have led many analysts to conclude that the ECB's next rate cut won't occur until September at the earliest.