Federal Reserve Chairman Jerome Powell said the U.S. central bank had made great progress in its pursuit of full employment and stable prices but was on the lookout for threats to the economy amid turmoil in financial markets.

Fed Chair-designate Jerome Powell with President Trump
Fed Chair-designate Jerome Powell with President Trump Bloomberg News

“We will remain alert to any developing risks to financial stability,” he said Tuesday in the text of his ceremonial swearing-in speech in Washington. “We are in the process of gradually normalizing both interest rate policy and our balance sheet with a view to extending the recovery and sustaining the pursuit,” of its twin statutory goals.

Financial markets last week suffered their most severe bout of volatility in years on concern that rising wages might spur inflation and prod the Fed to raise interest rates at a faster pace than investors had anticipated.

Powell formally took the oath of office on Feb. 5 to replace Janet Yellen as chair. The ceremony on Tuesday was attended by family, friends and other Fed officials.

Bloomberg News