The head of the US Federal Reserve says policymakers may continue to raise interest rates in an effort to combat persistent inflation.

Jerome Powell made the remarks on Friday at an annual conference held in Jackson Hole, Wyoming.

Fed policymakers have raised their key interest rates several times in an effort to bring down inflation. They had seen the situation start to improve.

Powell said, "Although inflation has moved down from its peak -- a welcome development -- it remains too high. We are prepared to raise rates further, if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective."

He emphasized that prices are still rising at a faster rate than the Fed's goal of 2 percent.

The meeting in Jackson Hole is closely watched by people seeking insight into the Fed's potential moves. It draws economists and central bank leaders from around the world.

Powell said there are signs the US economy continues to run too hot. He pointed to robust consumer spending and a possible rebound in the housing sector. However, he acknowledged that the Fed's policy of monetary tightening could also do unnecessary harm.

Investors on Wall Street were among those paying close attention to the remarks. They saw the markets briefly wobble on Friday but then regain their footing by the end of the session.

The Dow Jones Industrial Average ended the day 247 points higher, and the tech-heavy Nasdaq was up by 0.9 percent.

Analysts say Powell's message, when taken as a whole, has eased investors' concerns of an economic slowdown.