US Federal Reserve Chairman says growth has picked up enough to justify rate hikes

In his first speech on the economy since taking over at the US Federal Reserve, Chairman Jerome Powell said Friday that growth is running at a solid pace and continued gradual rate hikes will be necessary, CNBC reports.

While acknowledging challenges from low productivity and lagging labor force participation caused in part by the opioid crisis, Powell's remarks were mostly positive about the state of the economy.

"After what at times has been a slow recovery from the financial crisis and the Great Recession, growth has now picked up," the central bank chief said during a speech in Chicago. "The labor market has been strong, and my colleagues and I on the Federal Open Market Committee expect it to remain strong."

Considered in some corners of the market to be more hawkish on rates than his immediate predecessor, Janet Yellen, Powell said it's important to keep moving rates higher despite the lack of inflation.

"It remains the case that raising rates too slowly would make it necessary for monetary policy to tighten abruptly down the road, which could jeopardize the economic expansion," he said. "But raising rates too quickly would increase the risk that inflation would remain persistently below our 2 percent objective. Our path of gradual rate increases is intended to balance these two risks."