NEW YORK: US stock indexes fell on Tuesday as Federal Reserve Chair Jerome Powell told Congress the central bank will likely need to raise interest rates more than expected in response to recent strong data.

The Fed is prepared to move in “larger steps” if the “totality” of incoming information suggests tougher measures are needed to control inflation, Powell told US lawmakers. The remarks were his first since inflation unexpectedly jumped in January and the US government reported an unusually large increase in payroll jobs for the month.

Traders drastically increased their bets of a 50-basis-point rate hike in March after Powell’s comments, with money market futures pricing a more than 40% chance of such a move, from 23% before the remarks.

Meanwhile, Fed fund rates were seen peaking at 5.56% in September compared to 5.47% earlier. “Powell is reiterating what we already know, but he’s not saying anything that’s dovish, and the market is feeling a bit nervous about the Fed’s next move - how many rate hikes are coming and how long are they going to keep rates up,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.