Federal Reserve Chair Kevin Walsh stated that the slowdown in inflation during June does not signify the job is complete, marking his first indication since assuming the role of how the central bank might ultimately respond.

During a lengthy three-hour congressional hearing on Tuesday, lawmakers questioned Walsh on how he plans to fulfill his repeated promises to restore price stability, given the Fed's years-long failure to meet its 2% inflation target.

While the new Fed chief did not explicitly state that monetary policy would be tightened, he made it clear that options for curbing inflation include the use of interest rates.

"We have the tools to do it," Walsh said, referring to the Fed's monetary policy. "In the period ahead, I will be asking our colleagues for a full and robust internal discussion on the extent and timing with which we may need to employ those tools."

Economists noted that this statement does not signal an imminent interest rate hike but represents Walsh's closest public remarks to date acknowledging that policy tightening may be necessary.

"This may be the closest Walsh has come to acknowledging that the Fed may need to raise rates to address persistently high inflation, even without explicitly saying so," said Olu Sonola, head of US economic research at Fitch Ratings.

Economists at Goldman Sachs stated in a research note to clients that Walsh's remarks "hinted at his views on how to respond to high inflation driven by supply shocks."

However, not everyone found novelty in Walsh's comments.

Jason Furman, a professor at Harvard Kennedy School and former chief economist in the Obama administration, said Walsh's testimony was consistent and did not provide new guidance.

Although lower-than-expected inflation eased the pressure on Walsh during the hearing, lawmakers persistently questioned his plans to restore prices to the target level.

Walsh indicated that while June's inflation figures were better than anticipated, there is still a long road ahead.

"I'm not going to come here and declare victory," Walsh told the lawmakers. "What I will say is that there's a lot more work to do."