The US economic recovery is on track to return to a strong labor market, and the central bank could begin to withdraw its stimulus measures by year-end, Federal Reserve Chair Jerome Powell said Friday.

But the Fed leader stressed that there was no hurry to raise the benchmark lending rate in response to temporary inflation pressures.

In his highly anticipated speech to the annual Jackson Hole central banking symposium, Powell said despite the impact of the Delta variant of Covid-19, the economy has continued to recover and show strong job growth.

While inflation is currently running at a high 4.2 percent annually as of July, Powell said it was likely to decline as temporary pressures, like skyrocketing prices for used cars, recede.

He warned that moving to respond to temporary inflation pressures “may do more harm than good.”

“The ill-timed policy move unnecessarily slows hiring and other economic activity and pushes inflation lower than desired,” he said, warning that with the labor market still recovering, “Such a mistake could be particularly harmful.”

Any move to taper the pace of bond buying would still leave a large amount of stimulus in place, he added.

Powell did not provide details of the taper plans, but instead repeated the Fed’s stance that “it could be appropriate to start reducing the pace of asset purchases this year.”