Answering audience questions at an economics event in Sydney, San Francisco Federal Reserve Bank President John Williams said he believed a recent softening in U.S. inflation was transitory and that inflation would pick up to around 2 percent over the coming year.
According to Reuters, Williams emphasized that if inflation did not accelerate as expected, that would argue for a much slower pace of rate rises than currently projected.
He also noted that raising rates and trimming the balance sheet were complimentary forms of tightening and his projections for policy took that into account.