12:24 PM EDT, 05/08/2024 (MT Newswires) -- Monetary policy requires a cautious approach to assure inflation is slowing, which may take longer than previously expected, Boston Federal Reserve Bank President Susan Collins said Wednesday.

"I'm committed to bringing inflation sustainably back to our 2% target," Collins said in remarks at the Massachusetts Institute of Technology. "While realistic about the risks and uncertainties, I remain optimistic that this can be accomplished in a reasonable amount of time and with a labor market that remains healthy. But there is significant uncertainty around that outlook, and the recent data lead me to believe this will take more time than previously thought."

Making monetary policy requires "decisions based on a methodical, holistic assessment of wide-ranging information," she said, adding that policy is not on a preset path.

"Policy needs to not only reflect a steadfast commitment to restoring price stability, but also aim to preserve a healthy labor market (the other facet of our dual mandate)," Collins said. "There are risks from easing too soon, and from holding for too long, which would lead to unnecessary economic disruption. The current policy stance, which I view as being moderately restrictive, may be appropriate for balancing risks that are two sided."

Collins said she expects demand to slow further to align with supply, but the time of that process remains uncertain and will likely be uneven as the Federal Open Market Committee contemplates when to lower interest rates.

"The current situation requires methodical perseverance, recognizing that progress will take time and continue to be uneven," she said. "Expecting all indicators to be well aligned is too high a bar to start normalizing policy."

Collins next votes on the FOMC next year.