WASHINGTON (Reuters) - Federal Reserve governor Michelle Bowman said she still expects declining inflation to allow further interest rate cuts this year, but feels rising wages, buoyant financial markets, geopolitical risks, and upcoming administration policies could slow the process and keep price pressures elevated.

"Core inflation remains elevated, but my expectation is that it will moderate further this year. Even with this outlook, I continue to see upside risks to inflation," Bowman said in comments to a group of New England business executives.

"I would prefer that future adjustments to the policy rate be gradual. We should take time to carefully assess the progress in achieving our inflation and employment goals," said Bowman, who supported the Fed's decision this week to leave the benchmark overnight interest rate at the current range of 4.25% to 4.5%.

Bowman's comments were released just as new inflation data for December were to be published. Along with watching incoming official statistics, Bowman said the Fed's decision to hold rates steady for now would give policymakers time "to get clarity on the administration's policies and their effects on the economy. It will be very important to have a

better sense of the actual policies and how they will be implemented, in addition to greater confidence about how the economy will respond."

Those policies have already included deportation of immigrants, and it is expected to expand to include new import tariffs, which President Donald Trump has said he might announce as soon as this weekend.

Bowman, appointed to the Fed by Trump during his first term, has been among the more strict at the Fed about what may be needed to control inflation, and in her remarks laid out an extensive list of factors she feels may slow progress.

Trump has said he feels the Fed should lower rates.

Labor markets have eased, Bowman noted, but the economy remains near full employment with a pace of wage growth beyond what she feels is consistent with full employment. Global supply chains remain fragile to geopolitical shocks, she said, while buoyant U.S. markets and continued strong economic growth indicate Fed policy may not be all that restrictive.

"I continue to be concerned that easier financial conditions over the past year may have contributed to the lack of further progress on slowing inflation," Bowman said. "In light of the ongoing strength in the economy and with equity prices substantially higher than a year ago, it seems unlikely that the overall level of interest rates and borrowing costs are exerting meaningful restraint."