During an interview on CNBC's "The Exchange," Daly acknowledged that recent data on inflation has been promising, but stressed that it is still too early to declare victory. She compared the Federal Reserve's task of achieving "sufficiently restrictive" policy to riding a horse and not knowing if the bridle has been pulled back enough to stop.

Daly's comments came in the wake of Federal Reserve Chair Jerome Powell's remarks that the central bank is not yet confident that policy measures have reached the desired level of tightness to bring inflation down to the target of 2%. These remarks had sparked concerns in financial markets.

The Federal Open Market Committee (FOMC), for the second consecutive meeting, decided to maintain interest rates at their current levels, with the benchmark borrowing rate set between 5.25% and 5.5%, the highest in over two decades.

Daly, who will become an FOMC voter in 2024, refrained from expressing a specific stance on future rate changes. Instead, she highlighted the Fed's ability to assess incoming data and adapt its actions accordingly. She emphasized the importance of a forward-looking approach in order to appropriately respond to evolving economic conditions.

"We're going to be very forward-looking here, and so that's why it's too early to declare victory. But I don't want to discount the fact that we're in a good place because we can be able to move easily and agilely, depending on what the data brings," Daly stated.

The Federal Reserve has been closely monitoring inflation levels as the economy recovers from the COVID-19 pandemic. Higher inflation has sparked concerns among policymakers, as they aim to maintain price stability and support sustainable economic growth. The central bank has been employing various tools, including tighter monetary policy, to manage inflationary pressures effectively.

Daly's remarks highlight the delicate balance the Federal Reserve faces in achieving its policy objectives. While progress has been made, she acknowledges that continued vigilance and data-driven decision-making are necessary before declaring victory over inflation. The central bank remains committed to maintaining flexibility and making necessary adjustments as economic conditions evolve.

Market participants will closely watch future FOMC meetings and statements from Federal Reserve officials to gain further insights into the central bank's approach to managing inflation and its implications for monetary policy.