Fed's Williams says inflation is too high but will start coming down soon

NEW YORK — New York Federal Reserve President John Williams on Thursday said inflation is still too high but he is confident it will start decelerating later this year.

With markets on edge over the direction of monetary policy, Williams offered no clear signs on where he is leaning as far as possible interest rate cuts go. Instead, he reiterated recent positions from the central bank that it has seen a "lack of further progress" toward its goals as inflation readings have been mostly higher than expected this year.

"The honest answer is, I just don't know," Williams said during a question-and answer session with CNBC's Sara Eisen before the Economic Club of New York. "I do think that monetary policy is restrictive and is bringing the economy a better balance. So I think at some point, interest rates within the US will, based on data analysis, eventually need to come down. But the timing will be driven by how well you achieve your goals."

Williams called policy "well-positioned" and "restrictive" and said it is helping the Fed achieve its goals. Regarding potential rate hikes, he said "I don't see that as the likely case."

Earlier this year, markets had expected aggressive rate cuts from the Fed this year. But higher than expected inflation readings have altered that landscape dramatically, and current pricing is pointing to just one decrease, probably in November.

"With the economy coming into better balance over time and the disinflation taking place in other economies reducing global inflationary pressures, I expect inflation to resume moderating in the second half of this year," Williams said. "But let me be clear: Inflation is still above our 2% longer-run target, and I am very focused on ensuring we achieve both of our