Federal Reserve chairman Jerome Powell stressed on Tuesday that Congress has to increase the limit on the amount of national debt for the federal government to avoid default. Testifying before the Senate Banking Committee, Powell warned that the consequences in case a deal is not reached could be "extraordinarily adverse and do longstanding harm."

Powell said that the Fed will maintain efforts to restore price stability in the United States, noting that the economy is currently "very far" from this point. Answer a question from a lawmaker, Powell asserted that the Fed isn't looking to raise the unemployment rate despite it being tightly related to the annual inflation rate. "We are trying to realign supply and demand through a bunch of channels including job openings ... We are trying to create disinflation," he explained.