Washington DC, Aug. 5 -- Philadelphia Federal Reserve President and CEO Anna Paulson said the recent improvement in inflation was encouraging but not sufficient to determine the future course of monetary policy, adding that she is keeping "an open mind" to ensure policy achieves price stability and maximum employment.

In an essay released after the Federal Open Market Committee (FOMC) decided to keep the target range for the federal funds rate unchanged, Paulson said policymakers need more evidence on underlying inflation and the impact of supply-side shocks before making further policy decisions.

"The recent improvement in some inflation data is welcome. It is a step in the right direction, but it is only one step," Paulson said.

"I a...