This photo taken on April 20, 2022 shows the U.S. Federal Reserve in Washington, D.C., the United States. [Photo/Xinhua]

Additional interest rate hikes will likely be needed to lower inflation to the U.S. Federal Reserve's 2 percent target, Fed Governor Michelle Bowman said on Monday.

"We have made progress in lowering inflation over the past year, but inflation is still significantly above the FOMC's 2 percent target," Bowman said at an event in Atlanta, referring to the Federal Open Market Committee.

Bowman highlighted that the labor market continues to be tight, with job openings still far exceeding the number of available workers.

Given these developments, the Fed official said that she had supported raising the federal funds rate at the July meeting.

Last month, the Fed raised its benchmark interest rate by a quarter percentage point to a range of 5.25 percent to 5.5 percent, the highest level in 22 years.

Bowman expected that "additional increases will likely be needed to lower inflation to the FOMC's goal."

"I will be looking for evidence that inflation is on a consistent and meaningful downward path as I consider whether further increases in the federal funds rate will be needed, and how long the federal funds rate will need to remain at a sufficiently restrictive level," she said.

Bowman, one of the more hawkish members of the Fed's rate-setting committee, made similar comments in a speech on Saturday in Colorado, underlining further interest rates hikes will likely need to get inflation on a path down to the Fed's 2 percent target.

"We should remain willing to raise the federal funds rate at a future meeting if the incoming data indicate that progress on inflation has stalled," the Fed official noted on Saturday.

Fed officials are scheduled to decide further monetary policy in their meeting on Sept. 20, with an unusually long gap between meetings allowing them to review data on inflation, the job market and the macroeconomy.

After the latest rate hike in July, Fed Chair Jerome Powell left the door open to another increase in September, but also signaled that cooler data could lead to a pause.

With consumer prices continuing to show faster-than-expected signs of cooling in July, the market widely expects the Fed to be less aggressive with its monetary policy stance.

Many investors and some economists, with optimism, are currently betting against any further rates increases, and they even expect the central bank's next move to be a rate cut in the first months of next year.

Goldman Sachs economists said they continue to anticipate the Fed will "decide that a final hike is unnecessary" due to cooling inflation.

"We expect the decline in core inflation to more than outweigh the mid-year resilience in growth and wage data," Goldman Sachs economists wrote in a note on Friday.

According to the CME Group's FedWatch Tool, around 86.5 percent of market participants expect the central bank not to hike interest rates in September.

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