02:43 PM EDT, 06/24/2024 (MT Newswires) -- The Federal Open Market Committee must remain open adjusting policy as needed and said that it is still uncertain if inflation is truly on a downward path, San Francisco Federal Reserve Bank President Mary Daly said in Monday in prepared remarks to the Commonwealth Club World Affairs of California and the San Francisco Press Club.

"The bumpiness of inflation data so far this year has not inspired confidence," Daly said. "Recent readings are more encouraging, but it is hard to know if we are truly on track to sustainable price stability."

Daly acknowledged that there has been some improvement but cautioned that inflation remains elevated and that there is more work to be done.

"We have two goals, one tool, and a lot of uncertainty," Daly said. "So, being definitive and predetermined is not that helpful."

Rather, Daly said, the FOMC needs to be open the possibility that the economy may evolve differently than expected.

"For example, if inflation turns out to fall more slowly than projected, then holding the federal funds rate higher for longer would be appropriate," Daly said. "If instead, inflation falls rapidly, or the labor market softens more than expected, then lowering the policy rate would be necessary. Finally, if we continue to see gradual declines in inflation and a slow rebalancing in the labor market, then we can normalize policy over time, as many expect."

Daly is a voter on the Federal Open Market Committee in 2024.