(Reuters) – San Francisco Federal Reserve Bank President Mary Daly on Wednesday said she feels the U.S. central bank will be able to begin reducing the pace of its monthly asset purchases by year end, but believes an interest rate hike is still a “long way” away.

She said, after giving a talk online at UCLA, that she expected the U.S. central bank to make “substantial further progress” by year’s end if the economy continues to perform as it does now.

Fed set an even higher standard for increasing interest rates. This includes achieving full employment, and keeping inflation below 2%. It is on track to keep that rate high for a long time. “If we should get there in the time frame of next year that would be a tremendous win for the economy,” she said, but “I don’t expect that to be the case.”

According to her, 6 million Americans still remain off the job market. Although inflation is higher than expected, and the upward pressures could not ease until next year or so, she said it was “appropriate” for people to just wait and watch how things unfold.