Federal Reserve Governor Adriana Kugler said the US central bank should keep interest rates steady "for some time," citing accelerating inflation as tariffs begin to push up prices.

"Given the stability on the employment side of our mandate, with the unemployment rate remaining at historic lows, near-term inflation expectations high, and goods inflation rising due to rising tariff pressures, I feel it is appropriate to keep our benchmark interest rate at its current level for some time," Kugler said Thursday in prepared remarks for an event in Washington hosted by the Housing Partnership Network.

"This still-restrictive policy stance is important to keep longer-term inflation expectations anchored," she said.

Fed officials have held interest rates steady this year, despite lower-than-expected inflation reports, as they await the impact of President Donald Trump's tariffs. Kugler, with her remarks, joins several other policymakers who signaled this week that they are not yet ready to cut rates.

The Fed governor pointed to new price data released this week that indicated the Fed's preferred inflation measure, the personal consumption expenditures price index, likely rose 2.5% in the year to June, from 2.3% in May. The PCE report will be released later this month.

Kugler offered several reasons why a larger price impact from tariffs may still be forthcoming, arguing that some businesses are waiting to pass on higher costs to consumers due to inventory buildup and frequent changes in trade policy.

The Fed's patient approach this year has angered Trump, who has demanded the central bank reduce borrowing costs to allow for faster growth. On Wednesday, Bloomberg News and other media outlets reported that Trump would seek to remove Powell from his post, but the president later denied the reports. (alg)

Source: Bloomberg