10:38 AM EDT, 05/03/2024 (MT Newswires) -- The current stance of monetary is restrictive, but incoming data will determine the future path of monetary policy, Federal Reserve Governor Michelle Bowman said Friday in prepared remarks to the Massachusetts Bankers Association Annual Convention.

"At its current setting, our monetary policy stance appears to be restrictive, and I will continue to monitor the incoming data to assess whether monetary policy is sufficiently restrictive to bring inflation down to our target," Bowman said. "As I've noted recently, my baseline outlook continues to be that inflation will decline further with the policy rate held steady, but I still see a number of upside inflation risks that affect my outlook."

Bowman noted that recent inflation improvements are the result of further easing of supply chain issues, an increase in available workers and lower energy prices, rather than a slowdown in demand. In addition, geopolitical risks could push prices higher.

"In light of these risks, and the general uncertainty regarding the economic outlook, I will continue to watch the data closely as I assess the appropriate path of monetary policy," Bowman said. "The frequency and extent of data revisions over the past few years make the task of assessing the current state of the economy as well as predicting how the economy will evolve even more challenging, and I will remain cautious in my approach to considering future changes in the stance of policy."

Those assessments could mean being open to adjusting policy upward if needed, Bowman suggested, noting that monetary policy is not on a "preset course" and that decisions would be made meeting-by-meeting.

"While the current stance of monetary policy appears to be at a restrictive level, I remain willing to raise the federal funds rate at a future meeting should the incoming data indicate that progress on inflation has stalled or reversed," Bowman said. "Restoring price stability is essential for achieving maximum employment over the longer run."