Federal Reserve Board Chairman Jerome Powell warned the public on Tuesday that interest rates are likely to go higher than previously anticipated. Powell appeared before Congress to answer questions this week and elaborated that the Fed would accelerate the pace of rate increases if the data warrants. Bond traders have already responded to this possible shift in monetary policy, betting on a 0.5% rate increase at the March 22 policy meeting.

Powell cited January data that showed inflation reversing its slowdown, indicating the Fed’s job to fight inflation is not over. Market reactions suggest investors are optimistic that the central bank can achieve this without harming the economy too severely; stocks went slightly negative while Treasury yields jumped after Powell’s remarks were released.

The central bank has previously indicated the peak rate they had expected the key borrowing costs to reach, at 5.1%, but current market pricing suggests a slightly higher peak just below 5.6