03:43 PM EDT, 07/17/2025 (MT Newswires) -- Federal Reserve Governor Adriana Kugler said Thursday that she favors holding interest rates steady "for some time" amid tariffs-induced upward pressure on inflation.

In prepared remarks for delivery in Washington, D.C., Kugler said "there are many reasons to think that larger effects of tariffs are still coming."

The personal consumption expenditures price index likely rose 2.5% annually in June, which would reflect an acceleration from May's 2.3% gain. The personal income and outlays report for June is scheduled to release at the end of July.

"I find it appropriate to hold our policy rate at the current level for some time," she said, citing factors including rising goods inflation due to tariffs and high price growth expectations over the short term.

Kugler's views appear to be in contrast with some other policymakers. Last month, Fed Vice Chair for Supervision Michelle Bowman said she would support lowering interest rates as soon as July, provided that inflationary pressures remain "contained." Separately, Fed Governor Christopher Waller reportedly said the Federal Open Market Committee may be in a position to ease monetary policy as early as this month.

Minutes from the FOMC's June meeting showed that officials offered mixed views on the policy path ahead, with opinions ranging from "some reduction" in interest rates this year to no cuts at all. At the meeting, the FOMC kept its policy rate unchanged at 4.25% to 4.50% for a fourth straight time, while sticking to its federal funds rate outlook for 2025 amid higher inflation expectations.

Kugler said Thursday that core goods prices have recently pushed inflation up, partially reflecting the pass-through of tariffs. The Bureau of Labor Statistics reported earlier this week that consumer inflation accelerated last month at the fastest pace since January.

"Tariff rates could increase further, as seen in newly proposed reciprocal tariffs for several countries and the new tariffs on copper introduced last week, putting further upward pressure on prices," Kugler said.

Markets widely expect the central bank to again hold interest rates steady later this month, according to the CME FedWatch tool.

The Fed's most recent Beige Book showed Wednesday that economic activity rebounded between late May and early this month, though concerns about rising cost pressures grew.