WASHINGTON (Reuters) - Federal Reserve Chair Jerome Powell on Wednesday pledged “powerful support” to complete the U.S. economic recovery from the coronavirus pandemic, but faced sharp questions from Republican lawmakers concerned about recent spikes in inflation. In testimony to the U.S. House of Representatives Financial Services Committee, Powell said he is confident recent price hikes are associated with the country’s post-pandemic reopening and will fade, and that the Fed should stay focused on getting as many people back to work as possible. Any move to reduce support for the economy, by first slowing the U.S. central bank’s $120 billion in monthly bond purchases, is “still a ways off,” Powell said, with 7.5 million jobs still missing from before the pandemic. “The high inflation readings are for a small group of goods and services directly tied to the reopening,” Powell testified, language that indicated he saw no need to rush the shift towards post-pandemic policy. The Fed at this point expects to continue its bondbuying until there is “substantial further progress” on jobs, with interest rates pinned near zero likely until at least 2023. But the back and forth from lawmakers showed how central recent price increases have become in the broader public and political debate around the Fed, with Democrats urging Powell not to nip off the recovery with tighter policy and Republicans worried about a too-slow response. The latest version of the Fed’s own Beige Book collection of anecdotal reports about the economy called out “broad-based” price increases, and said that “the majority” of the Fed’s business contacts “expected further increases in input costs and selling prices in the coming months.” Missouri Republican Ann Wagner noted that Powell at a prior hearing in February said that coming price increases would be “temporary.” A half-year later, she said, “I can tell you that the families and businesses I represent are not feeling that these price spikes are temporary. ..It is housing, appliances, food prices, gas.” Representative Anthony Gonzalez, a Republican from Ohio, took aim at a new Fed framework that aims to encourage higher employment by letting inflation run “moderately” above the central bank’s 2% target “for some time” “How long is ‘some time’?” Gonzalez asked, arguing that the Fed’s current policies may be doing little to encourage employment at a time when employers are already posting record numbers of jobs. “It depends,” Powell said, demonstrating the dilemma he faces if prices continue rising. “Right now inflation is well above 2%. ... The question for the (Federal Open Market) Committee will be, where does this leave us in six months?” U.S. Treasury yields fell in response to Powell’s testimony even though data on Wednesday showed prices of factory inputs rose at a faster-than-expected pace in June, an indication markets construed his comments as a sign the monetary taps will stay open. The Fed’s June meeting saw officials begin a move towards post-pandemic policy, with some of them poised to tighten financial conditions sooner to ensure inflation remains contained. Powell himself promised that if the Fed’s “narrative” does not pan out and inflation slow, “we will use our tools to guide inflation back down.” But “it would be a mistake to act prematurely.” Consumer prices in June rose at a 5.4% annual rate, the fastest in 13 years, and the jump in costs at the factory gate signaled ongoing price pressure. (Graphic: Yields, long-run inflation outlook dip - ) RISING DELTA Among the risks to consider is the possibility that renewed risks around the coronavirus Delta variant could slow the recovery if household and business spending wanes amid a rise in new infections. Falling Treasury bond yields have indicated concern among investors about slowing U.S. economic growth as case counts begin to rise again. The Fed’s own outlook of continued progress on jobs and an eventual exit from crisis-era policies hinges on continued reopening of the economy, recovery in the “social” industries devastated by the health crisis, and the willingness of the currently unemployed to fill the record number of jobs on offer. When Powell last spoke about the economy at a news briefing after the end of the June 15-16 policy meeting, new daily coronavirus infections were falling toward recent lows, and the Fed dropped language from its policy statement that the pandemic “continues to weigh on the economy.” Since then the Delta variant has pushed the seven-day moving average of cases from 11,000 to above 21,000, and health officials are concerned about the spread of the variant in parts of the country where vaccination rates are low. The numbers are more ominous globally. Powell is scheduled to appear before the U.S. Senate Banking Committee at 9:30 a.m. (1330 GMT) on Thursday. Reporting by Howard Schneider and Lindsay Dunsmuir; Editing by Dan Burns, Paul Simao and Andrea Ricci Our Standards: The Thomson Reuters Trust Principles.