NEW YORK (Reuters) - Federal Reserve Bank of Boston President Susan Collins said Thursday the strength of the economy and uneven retreat of inflation argues against a near term push to lower rates by the central bank.

"I do expect it will be appropriate to begin lowering the federal funds rate later this year," Collins said in the text of a speech prepared for delivery before a gathering of the Economic Club of New York. That said, "recent data suggest it may take more time than I had previously thought to gain greater confidence in inflation's downward trajectory, before beginning to ease policy," the official said.

Collins weighed in as markets have been digesting stronger-than-expected inflation data over the start of the year. Coupled with ongoing robust job gains, traders and investors have been marking down the prospects of Fed rate cuts and pushing back the start date of the easing, even as Fed officials say they think they're still on track for some sort of lowering of what is now a 5.25% to 5.5% federal funds rate.

In her remarks, Collins said monetary policy is in a good position right now and there's increasing evidence that despite the high level of the short-term rate target policy may not be providing as much restraint as expected.

"It may just take more time than previously thought for activity to moderate, and to see further progress in inflation returning durably to our target," Collins said. "Less concern about labor market fragilities, combined with the possibility that policy is only modestly restrictive, also reduces the urgency to ease," she said.

Collins said that while it's not a surprise that inflation's retreat toward 2% hasn't been as robust over recent months as it was last year, "disinflation may continue to be uneven." For the Fed, "this also implies that less easing of policy this year than previously thought may be warranted."

While risks for the outlook abound, Collins said she was cautiously optimistic about the outlook.

"I expect to see further evidence that inflation is durably, if unevenly, returning toward 2 percent, and that the economy is coming into better balance, with demand and supply more closely aligned amid a healthy labor market," the official said.