Federal Reserve Chairman Jerome Powell is sketching an optimistic view of the economy but signaling that continued low inflation means higher interest rates won't likely be necessary anytime soon.

Powell says that even with unemployment near a 50-year low of 3.6%, there's still "plenty of room" for wages to rise and for more Americans to join the workforce. He notes that annual inflation remains below the Fed's 2% target level.

The Fed chairman is making his remarks in a speech to the Greater Providence (Rhode Island) Chamber of Commerce.

The central bank has cut its benchmark short-term rate...