By Howard Schneider and Lindsay Dunsmuir

WASHINGTON, March 2 (Reuters) - The Federal Reserve will move forward with plans to raise interest rates this month to try to tame high inflation, but the outbreak of war in Ukraine has made the outlook "highly uncertain" for U.S. central bank policymakers as they plan their next steps, Fed Chair Jerome Powell said on Wednesday.

In prepared remarks for his testimony to the U.S. House of Representatives Financial Services Committee, Powell reiterated the core Fed narrative that high inflation and an "extremely tight" labor market warrant higher interest rates.

"We expect it will be appropriate to raise the target range for the federal funds rate at our meeting later this month," Powell said, and that the Fed will follow that later this year with reductions to its roughly $8.5 trillion portfolio of government securities.

But in his opening statement to lawmakers Powell gave no hint about how far or how fast the Fed may need to go in its policy tightening, said Fed officials still expect inflation to ease later this year, and framed the start and conclusion of his remarks with the events unfolding in Ukraine.

The coronavirus pandemic's impact on the economy appeared to be easing, he said, hiring remains strong, and inflation had emerged as a chief risk.

Inflation "is now running well above our longer-run objective of 2%. Demand is strong, and bottlenecks and supply constraints are limiting how quickly production can respond," the Fed chief said. He added that those supply disruptions had been "larger and longer lasting than anticipated," and restated the Fed's promise to be as tough as necessary to bring prices back into line.

While some of those current inflation pressures are expected to ease later this year, "we are attentive to the risks of potential further upward pressure ... We will use our policy tools as appropriate to prevent higher inflation from becoming entrenched."

Yet Powell also acknowledged the new complexity the Fed faces from events in Europe that have the potential to both add to price pressures, but also to potentially undercut growth.

"The near-term effects on the U.S. economy of the invasion of Ukraine, the ongoing war, the sanctions, and of events to come, remain highly uncertain," Powell said. "Making appropriate monetary policy in this environment requires a recognition that the economy evolves in unexpected ways. We will need to be nimble in responding to incoming data and the evolving outlook."