Collins said that while core inflation pressures remain elevated, she is increasingly confident inflation is moving back to the Fed's 2% target.

Dallas Federal Reserve Bank President Lorie Logan on Wednesday said she supported last month's outsized interest-rate cut but wants smaller reductions ahead, given "still real" upside risks to inflation and "meaningful uncertainties" over the economic outlook.

Pointing to the consensus among her colleagues for two more 25 basis point rate cuts this year, Collins said in a speech in Boston that "further adjustments of policy will likely be needed." She stressed that rate cuts are not on a pre-set path and that the Fed will remain data-dependent.