Federal Reserve Chair Jay Powell said Wednesday that he expects the central bank to raise interest rates by a quarter-point this month, despite the economic uncertainty generated by the Russian invasion of Ukraine.

“I do think it will be appropriate to raise our target range for the federal funds rate at the March meeting in a couple of weeks, and I’m inclined to propose and support a 25-basis-point rate hike,” Powell told the House Financial Services Committee.

The Fed chief said he thinks inflation will ease in the coming months, “as supply constraints ease and demand moderates because of the waning effects of fiscal support and the removal of monetary policy accommodation.”

At the same time, Powell reiterated that the Fed would continue to monitor the economy for new signs of trouble, including problems that could arise from the situation in Ukraine. “The conflict is causing tremendous hardship for the Ukrainian people,” he said. “The implications for the U.S. economy are highly uncertain, and we will be monitoring the situation closely.”

If inflation fails to ease, Powell said the Fed was ready to take stronger steps. “And to the extent that inflation comes in higher or is more persistently high … then we would be prepared to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings.”

Economy showing strength: “The labor market is extremely tight,” Powell said, noting that January’s 4% unemployment rate is close to the “longer-run normal level.” Powell noted that labor market improvements have been widespread, with wages rising at the fastest pace in years.

Reducing the Fed’s balance sheet: As part of its effort to provide a cushion for the Covid-ravaged economy, the Fed bought Treasuries and mortgage-backed securities at a rapid clip, bringing the total value of the bank’s balance sheet to nearly $9 trillion. Now the Fed plans to start reducing its holdings, though the timing is still uncertain.

“The process of removing policy accommodation in current circumstances will involve both increases in the target range of the federal funds rate and reduction in the size of the Federal Reserve’s balance sheet,” Powell said. “As the FOMC noted in January, the federal funds rate is our primary means of adjusting the stance of monetary policy. Reducing our balance sheet will commence after the process of raising interest rates has begun, and will proceed in a predictable manner primarily through adjustments to reinvestments.”

Aiming for a soft landing: Some economists warn that the Fed is running the risk of crashing the recovery if it raises rates too aggressively. But Powell said he was confident that the central bank can reduce inflation without causing a recession. “It’s more likely than not that we can achieve what we call a soft landing,” he said.