Federal Reserve Governor Christopher Waller said he’s encouraged by a recent slowing of economic activity, which may indicate the central bank’s policy is tight enough to contain inflation that still remains too high.

“I am increasingly confident that policy is currently well positioned to slow the economy and get inflation back to 2%,” Waller said Tuesday in prepared remarks for an event at the American Enterprise Institute in Washington. “I am encouraged by what we have learned in the past few weeks — something appears to be giving, and it’s the pace of the economy.”

In a speech referencing remarks he made last month, when growth and inflation data were picking up rather than slowing down, Waller said data since then has moved in the right direction. He also pointed to fourth-quarter forecasts that predict a further cool down. He emphasized, however, that inflation remains too high and it’s still too early to be fully confident that recent progress is sustainable.

Waller also said long-term Treasury yields are still higher than they were before the middle of the year, and financial conditions overall are still tighter, despite a pullback since the Fed’s last policy meeting.

“But the recent loosening of financial conditions is a reminder that many factors can affect these conditions and that policymakers must be careful about relying on such tightening to do our job,” he said.

Read More: Waller Says Fed Can ‘Watch and See’ If More Rate Hikes Needed

Policymakers kept interest rates unchanged at a 22-year high for a second straight meeting earlier this month. Recent economic reports have bolstered Fed watchers’ bets that the central bank is done raising rates.

The consumer price index was flat in October, compared to September, and the slowdown in price increases was “broadly distributed,” Waller said. He said an easing in the price of goods is contributing to overall inflation progress, but services prices excluding housing — a key benchmark cited by many policymakers — isn’t moderating as much as other categories.

“This is encouraging, but it is not enough evidence to be sure it will continue,” Waller said. “Just a couple of months ago, inflation and economic activity bounced back up, and the future was looking less certain.”

He also lauded a cooling in the labor market, though he said it remains fairly tight.