John Williams, CEO of the Federal Reserve Bank of New York, speaks at an event in New York
John Williams, chief executive officer of the Federal Reserve Bank of New York, speaks at an event in New York, U.S., November 6, 2019. Reuters

Federal Reserve Bank of New York President John Williams said Friday uncertain developments with financial conditions will be a key contributor to his thinking about what's next for central bank interest rate policy.

"The economic outlook is uncertain, and our policy decisions will be driven by the data and the achievement of our maximum employment and price stability mandates," Williams said in the text of a speech. "I am confident that our actions will bring inflation down to our 2% longer-run goal," the official said.

But Williams, who also serves as vice-chairman of the rate-setting Federal Open Market Committee, stopped short of saying what he thinks lies ahead for monetary policy in the wake of turbulent financial conditions tied to a spate of bank failures.

When the Fed met last week and raised its overnight target rate it noted that tighter financial conditions will likely weigh on growth. Some at the central bank have hinted this restraint may take pressure off the Fed to raise rates much beyond their current 4.75% to 5% range.

In thinking about monetary policy, "I will be particularly focused on assessing the evolution of credit conditions and their effects on the outlook for growth, employment, and inflation," Williams said in his speech.

The New York Fed president's remarks Friday were his first since the FOMC met last week. At that gathering, officials penciled in one more increase for this year and then steady policy for the remainder of the year.

In his remarks, Williams laid out some short-term pain for the economy as the Fed uses policy to cool inflation.

The official said he expects inflation to ebb to 3.25% this year. Earlier Friday, the government reported that the overall level of the personal consumption expenditures price index ticked down slightly to a 5% year-over-year advance in February. Williams said he expects to hit the 2% target in the next two years.

Meanwhile, he sees U.S. gross domestic product growing modestly this year and then faster in 2024, with the jobless rate, now at 3.6%, moving up to around 4.5% over the next year.

Williams, who was set to take audience questions, did not comment on the surge in emergency Fed lending banks have tapped over recent weeks, which was largely stable at very a very high number as of Wednesday.