Following the January Nonfarm Payroll report, which showed a net gain of 517K jobs and the unemployment rate dropping to a 53-year low of 3.4%, investors feared that the hotter-than-expected jobs report would reignite a hawkish twist from policymakers.

In a highly anticipated appearance at an event in Washington, D.C. on Tuesday, Federal Reserve Chair Jerome Powell largely repeated its prior remarks he delivered as part of the last Fed’s policy announcement. He reiterated that the Fed would need more rate hikes and hold the policy at restrictive levels for a period of time as the battle against inflation is likely to be long.

While he also admitted that the jobs report was stronger than anyone anticipated, reinforcing his view that it will take a long time to ease inflation to the Fed’s target of 2%. His comments that a renewed increase in immigration after a sharp slowdown earlier in the pandemic seems to be alleviating the labor shortage, calmed the market and investors were relieved from the fact that he didn’t tilt his stance and take an aggressively hawkish turn.

Powell’s comments on Tuesday follow his press conference last week after the Federal Reserve raised interest rates by 25 basis point, where he said that the central bank believes it’s making solid progress in bringing down inflation.

Markets are now pricing in 100% probability that the Fed will hike rates by 25 basis point on the 22nd of March and 76% odds for another 25 basis point increase on the 3rd of May. That would bring the federal funds rate to a 5%-5.25% range, which December Fed projections indicated would be the likely peak of the cycle.

After Friday’s Nonfarm Payroll report Wall Street sees around 40% odds that the Fed might make one additional rate hike, up from 3.6% just a week ago. However, markets still see more than 60% chance that the Fed will cut its key rate to 4.75%-5% by year’s end.