Federal Reserve Governor Michael Barr indicated that policymakers may need to keep interest rates unchanged for "some time" to address inflation that remains significantly above the central bank's 2% target.

"While I expect inflation to decline as the impact of tariffs on prices fades later this year, before considering further reductions in the policy rate, I want to see evidence that goods and services price inflation is sustainably moderating, provided labor market conditions remain stable," Barr stated in prepared remarks for an event in Phoenix on Tuesday.

Barr expressed his support for the Fed's decision last week to maintain the benchmark interest rate unchanged for the second consecutive meeting.

Barr noted that the situation in the Middle East poses "additional risks." He explained that rising oil prices tend to quickly translate into higher gasoline costs, placing particular pressure on middle- and low-income households.

"I believe that during our assessment of the economic situation, we may need to keep rates steady for some time," he said.