Federal Reserve Chairman Jerome Powell said he does not believe the United States is currently in a recession

Federal Reserve Chairman Jerome Powell said on Wednesday that he does not believe the US economy is in a recession as the central bank raised interest rates further to fight inflation.

Powell said at a press conference following the Federal Reserve’s decision to raise interest rates by 0.75 percentage points versus for the second time in a row. “This is a very strong labor market…it doesn’t make sense for the economy to be in a recession with this kind of thing happening.”

Wednesday’s rate hike represents the latest step in the Federal Reserve’s efforts to curb the strongest inflationary pressures in nearly four decades. Markets jumped after the increase was announced, with the Dow Jones Industrial Average adding more than 450 points and the heavy Nasdaq Composite up 4%.

Investors had feared that the Fed’s hike campaign could push the economy into recession, but Powell also said the central bank will closely monitor economic data to determine future moves. While another significant increase may be necessary, he added, there will come a point where the Fed needs to slow the pace of increases.

Investors will get another important data point to discuss the recession this week.

A preliminary reading of second-quarter gross domestic product is due on Thursday, with economists polled by Dow Jones predicting that the economy has barely expanded — after a 1.6% contraction in the first quarter.

Many on Wall Street refer to two consecutive negative quarters as recessions, but The official definition takes into account more factors than just GDP.

Powell indicated on Wednesday that he hasn’t seen the GDP report yet, but is waiting to see what he has to say.

“You tend to take the first GDP reports very carefully,” he said.