12:36 PM EDT, 06/05/2025 (MT Newswires) -- Increased upside risk to inflation from higher tariffs and stable labor markets and employment suggest that the interest rates should be held steady, Federal Reserve Governor Adriana Kugler said Thursday at the Economic Club of New York.

"Disinflation has slowed, and we are already seeing the effects of higher tariffs, which I expect will continue to raise inflation over 2025," Kugler said. "I see greater upside risks to inflation at this juncture and potential downside risks to employment and output growth down the road, and this leads me to continue to support maintaining the FOMC's policy rate at its current setting if upside risks to inflation remain."

Kugler added that she sees the "current stance of monetary policy as well-positioned for any changes in the macroeconomic environment."

Other Federal Reserve officials have also urged caution in considering rate reductions considering the uncertainty of the inflation outlook due to tariffs.

Quiet period for Fed officials begins on Saturday ahead of the June 17-18 Federal Open Market Committee meeting.