Federal Reserve Chairman Jerome Powell said that the unemployment rate, already at a 50-year low, could drop further without necessarily causing inflation to rise.

"The data is not sending any signal that the labor market is so hot or that inflation is moving up," Powell said during a hearing at the congressional Joint Economic Committee. "What we have learned ... is that the U.S. economy can operate at a much lower level of unemployment than many thought."

The chairman also said that wages were rising.

"If you go back five years, wages and compensation were going up to about 2%, that has gradually moved up to 3% — so that’s really the trend has been upward ... We’ve seen wages moving up,” Powell said.

“That’s true across all major measures of wages over the last, let's say, 5 to 6 years,” he said.

[Read more: Fed chair indicates no more interest rate cuts this year]