Federal Reserve Chair Jerome Powell sent markets into retreat once again Tuesday with a warning to Congress that interest rates may be heading higher than previously thought. It’s important to remember that he could well change his mind — maybe as soon as this week.

Powell, of course, had the unenviable job of delivering remarks to US lawmakers amid a uniquely uncertain economic backdrop. In late 2022, it appeared that key parts of the economy were moderating in accordance with the Fed’s inflation-fighting goals, and consumer price increases seemed to be cooling. But then data from January suggested that the economy was reaccelerating, and progress on the inflation fight seemed to falter.

As Powell put it on Tuesday: "The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated. If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes."

Translation: The central bank is open to raising the fed funds target range by 50 basis points later this month to a range of 5% to 5.25% if necessary. Powell’s remarks pushed yields on two-year notes to a 15-year high and dragged the S&P 500 Index down 0.9% at the time of writing.

It’s easy to see why investors would read that paragraph as hawkish, but the operative word there is “if,” and it seems silly to speculate at this point. Investors will get more clarity on that matter in just three days with the release of new nonfarm payroll data, followed on Tuesday by an updated consumer price index.

Until then, there are innumerable reasons to question whether the Fed — or, indeed, the markets — truly understand what’s happening in the surprisingly strong employment, retail sales and inflation data to start the year. The numbers could reflect residual seasonality (inflation data is often, oddly, hot to start the year); looser financial conditions (which have since partially tightened again); and perhaps just general volatility in data (plummeting survey response rates have raised questions about the signal and noise in the month-to-month readings). As much as ever before, Powell and his colleagues are feeling their way around in the dark, and declarations from the data-dependent central bank should take a back seat to data releases themselves. (And, yes, even those come with a lot of asterisks.)

The highlight of the stunning January data, of course, was the addition of 517,000 jobs on US nonfarm payrolls, far above the level that the Fed sees as helping it curb inflation. As Anna Wong, the chief US economist for Bloomberg Economics, noted on a call this week, weather is one potentially significant explanation for the unusual jump. The unseasonably warm weather caused by the La Nina weather pattern could have provided a short-run boost, but history shows such effects don’t endure. As Wong puts it, past experience shows “it will be a wash” in the average job creation numbers over four months. She also offered a few other possible explanations for the strong January report: many announced layoffs haven’t yet shown up in the data (but will eventually), and there are still structural worker shortages in many sectors (education, health care and construction.)

None of this is necessarily bullish — the coming data could certainly swing either way. Economists expect February’s job growth to slow considerably to 224,000 jobs — a number that is still too strong for the Fed’s objectives but leads to vastly different interpretations from January’s figure. Yet as recent months have made clear, central bankers and economists don’t have a crystal ball, and it’s becoming harder and harder to get worked up about hawkish comments when they’re just a single data release away from irrelevance.

Jonathan Levin has worked as a Bloomberg journalist in Latin America and the U.S., covering finance, markets and M&A. Most recently, he has served as the company's Miami bureau chief. He is a CFA charterholder.