NEW YORK (Reuters) - Federal Reserve Governor Michelle Bowman said it's not time for the U.S. central bank to consider cutting its interest rate target and noted that more hikes could be on the table if progress on lowering inflation stalls out.

While inflation has cooled and is likely to continue to move back to the 2% target, "we are still not yet at the point where it is appropriate to lower the policy rate, and I continue to see a number of upside risks to inflation," Bowman said in the text of a speech prepared for delivery before a gathering on the Shadow Open Market Committee in New York.

Bowman said her outlook still holds for more declines in inflation with ongoing strength in the labor market. And if that happens, "it will eventually become appropriate to gradually lower the federal funds rate to prevent monetary policy from becoming overly restrictive."

For now, "our monetary policy stance is restrictive and appears to be appropriately calibrated to reduce inflationary pressures," Bowman said.

But she added a further hawkish turn is not out of the question for the Fed. "While it is not my baseline outlook, I continue to see the risk that at a future meeting we may need to increase the policy rate further should progress on inflation stall or even reverse," Bowman said.

Bowman's comments follow the release earlier in the day of a key report describing the labor market last month. That data showed a very strong labor sector, with payrolls adding a better than expected 303,000 jobs in March, amid a decline in the unemployment rate from 3.9% in February to 3.8% last month.

The strong hiring data served as more evidence that despite aggressive Fed rate hikes the economy continues to motor forward. Speaking this week, a range of Fed officials, including Fed Chairman Jerome Powell, cautioned patience on the question of cutting rates while policy makers gather more evidence that inflation is moving lower before acting. Some officials are even beginning to question whether or not the Fed will be able to cut rates at all this year.

In her remarks, Bowman said there are upside risks to inflation on a number of fronts. Bowman also said that a possible rise in the level of neutral rates could mean the Fed ultimately cuts rates less that it otherwise would.

Bowman also cautioned on efforts to bolster rules on bank capital levels.

"Policymakers should carefully consider whether the significant capital increases included in the U.S. Basel III proposal meet this standard of being efficient and appropriately targeted," the official said.