(Bloomberg) -- Federal Reserve Governor Michelle Bowman said she continues to think the central bank will need to raise interest rates higher to contain inflation, but added a surge in Treasury yields since September has led to tighter financial conditions.

“I continue to expect that we will need to increase the federal funds rate further to bring inflation down to our 2% target in a timely way,” Bowman said in prepared remarks Tuesday at an event hosted by the Ohio Bankers League.

Bowman said the federal funds rate, which policymakers kept in a range of 5.25% and 5.5% at their meeting last week, “appears to be restrictive, and financial conditions have tightened since September.” 

Bowman said some of the tightening has occurred through a recent surge in long-term Treasury yields, which she noted can be volatile over time. It’s too soon for policymakers to know the effects that tighter financial conditions will have on the economy and inflation, she added.

“Moreover, there is an unusually high level of uncertainty regarding the economy and my own economic outlook, especially considering recent surprises in the data, data revisions, and ongoing geopolitical risks,” she said. “But I will be closely watching the incoming data as I assess the implications for the economic outlook and the appropriate setting of monetary policy.”

Bowman said she remains willing to support raising rates at a future meeting if incoming data show that progress on inflation has stalled “or is insufficient to bring inflation to 2% in a timely way.”

She said the latest employment report “showed a labor market with healthy job gains.” The report showed employers added 150,000 jobs in October, following a gain of 297,000 in September.

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