"While more people are getting vaccinated, the pace of vaccination has slowed," Powell explained. "A couple of months ago, we were ahead of many other similar countries in vaccination. Now we're falling behind, and one result you're seeing is the current outbreak of the delta strain that we're seeing in some parts of the country."

According to the Centers for Disease Control and Prevention, more than 315 million COVID-19 vaccine doses have been administered to date, with roughly 72% of U.S. adults receiving at least one dose and 61.8% fully vaccinated.

While acknowledging that people and businesses have been able to adapt during the pandemic, Powell warned COVID-19 is "still casting a shadow on economic activity."

"We can't declare victory yet on that," he added.

The comments came as Powell fielded questions from students and educators during a town hall covering basic information about the U.S. central bank and the importance of economics education.

Despite being forced to adapt to an upended world, Powell expressed hope that students would be able to turn the lessons learned from the pandemic into "profound tools of change."

"I hope this will cause you to think about how you want to make your mark, knowing that things do change and sometimes they change quickly," Powell said. "This is an extraordinary time and I believe that it will result in an extraordinary generation as long as we continue to have extraordinary educators to guide them. Their education is the foundation of our economy, indeed of our society."

On Wednesday, the Federal Reserve will release the minutes from its July meeting. Investors will be watching closely for guidance on when Fed officials plan to taper their support for the economy.