(Reuters) -As he heads toward retirement at month's end, Philadelphia Federal Reserve President Patrick Harker says interest rate cuts remain a possibility this year amid a very uncertain economic landscape, as he also flagged worries about the quality of economic data policymakers use to make their decisions.

When it comes to easing monetary policy, "it's possible, I would never take it off the table," Harker said in an interview with Reuters on Thursday. "If the signals are such that inflation doesn't look like it's moving rapidly north, but unemployment does then, yeah, I could definitely see making one or more cuts this year, but it's hard to say at this point."

Harker was interviewed in the final weeks of his tenure, as he's set to retire at the end of June after taking the reins of the Philadelphia Fed in 2015. The Fed next meets on June 17-18 when it is universally expected to hold its interest rate target steady at between 4.25% and 4.5%.

What happens later in the year is up in the air, as the Trump administration's chaotic trade policy featuring ever-changing high import taxes will likely drive up inflation and lower employment. The question facing Fed officials is whether the inflation rise is a one-off or the makings of something more enduring. Those uncertainties have blunted officials' ability to provide guidance on the monetary policy outlook and have pushed them into signaling a wait-and-see attitude.

Harker, an engineer by training who led the University of Delaware before coming to the Fed, said in the interview that he was increasingly worried about the quality of the data policymakers in general rely on.

Data, including that produced by the government, is "not good. It's not getting better," Harker said. "It's not just inflation data but a whole host of data, so we're increasingly flying blind, or at least half blind."

Harker's worries about the state of data come in the wake of reports the government was cutting back on resources devoted to compiling the closely watched consumer price index, which provides a critical reading that informs things like the wage changes in union contracts and the setting of social security benefits.

FISCAL WORRIES MOUNT

Harker leaves office at the end of the month due to Fed rules that in most cases stop regional Fed presidents from serving once they are 65. He will be succeeded by Anna Paulson, a long-time central banker who led the research operation at the Chicago Fed.

Reflecting on his decade at the central bank, Harker said the time since Donald Trump returned as president has stood out as even more challenging than the pandemic years, when it was more clear what the Fed needed to do to steer the economy, at least at the onset.

But the Fed's misreading of the inflation surge in the wake of the pandemic provided him with a crucial lesson, which was the importance of gathering and taking on board soft economic data and what people are saying is happening, relative to top-level statistical, or hard, data.

Looking ahead, Harker said it is critical that the Fed better educate people on what it can and cannot do, because if it doesn't, its independence could be under threat due to a belief it is all powerful when it comes to the economy.

There is a sense that "the Fed is this all-powerful being that controls your life, which isn't true," Harker said. "It shouldn't be true, and it isn't true, but to dispel that, we've got to keep it as simple as possible" and explain "what we do, what we don't do. And I think we've got to send that message loud and clear."

Harker also said that he hopes that when the Fed uses bond buying and its balance sheet to aid the economy it does so sparingly, with a clear explanation for what it is doing. As the Fed slowly winds down holdings of Treasuries and mortgage bonds bought during the pandemic and its immediate aftermath, it should be open to selling mortgage bonds in a bid to get back to all Treasury holdings.

Selling mortgages is not needed now but could be an option later, he said.

Harker also said in the interview that threats from huge government deficits are growing and need to be addressed, and that time is running short to do this.

"I'm very worried about the deficit," Harker said. "I don't think we're at risk today, but we could be at risk in the not-too-distant future if we don't act." The central banker noted market pricing and Wall Street leaders are starting to send signals of trouble that should not be ignored.

Noting other parts of the world are working to step up as rivals to the U.S. financial system, Harker said when it comes to getting government finances on a firmer footing, "we have to work at it and make sure that our fiscal house is in order."