(Bloomberg) -- Federal Reserve Bank of New York President John Williams said policymakers’ projections show they think more work is needed on interest rates to get inflation back down to 2%.

“We can take some time and assess and collect more information and then be able to act, knowing that we also communicated through our projections that we don’t think we’re done, based on what we know,” Williams said Wednesday during a discussion held at the New York Fed as part of the annual meeting of the Central Bank Research Association. “And obviously we’re absolutely committed to achieving our 2% inflation goal.”

Policymakers held interest rates steady last month after 10 consecutive increases to give themselves more time to evaluate how the economy is responding to higher borrowing costs and recent banking strains. Fed officials’ latest quarterly projections also showed the majority expect they will need to raise rates by an additional 50 basis points this year.

Williams said he would be data-dependent when deciding the Fed’s next steps, noting that recent economic data showing a stronger-than-expected housing market, resilient growth and a slowdown in consumer spending have been “informative.”

He also said the incoming data the Fed has seen so far support the “hypothesis” that the Fed has more work to do on monetary policy.

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Fed Chair Jerome Powell said last week he wouldn’t rule out hikes at consecutive meetings in the future, after foregoing an increase in June. Investors largely expect the US central bank to raise rates by a quarter point when they meet later this month on July 25 and 26, according to pricing in futures contracts.

The personal consumption expenditures price index, the measure of inflation the Fed targets, rose in May at the slowest annual pace in more than two years, Bureau of Economic Analysis figures published Friday showed. But policymakers have been more focused on core prices, which exclude food and energy. Those increased 4.6% in the 12 months through May, compared with 3.8% for the broader gauge.

Williams said core inflation has remained high, but nodded to the progress seen on bringing inflation down so far, including in a gauge of non-housing services prices that Fed officials have been watching closely.

“Even in the category of core services excluding shelter, we’re seeing some slowing of inflation,” he said.

The Fed will get two key economic reports before the July meeting, including the June employment report due Friday and readings on consumer prices for the same month on July 12. 

Williams said median projections from Fed officials show that they expect to cut rates in 2024 and 2025 as inflation comes down, but that he sees real rates staying restrictive for “quite some time.” The ultimate path for nominal interest rates will depend on what happens with inflation and the economy, he said.

--With assistance from Laura Curtis and Ana Monteiro.

(Updates with more comments from Williams starting in the fifth paragraph.)

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