New York (TIP)- U.S. Federal Reserve officials on Tuesday reiterated their support for further interest-rate hikes to quell inflation, with the influential chief of the New York Fed saying the central bank will likely need to get its policy rate “somewhat above” 3.5% and keep it there through the end of 2023.

“I see us needing to kind of hold a policy stance – pushing inflation down, bringing demand and supply into alignment – it’s going to take longer, will continue through next year,” New York Fed chief John Williams told the Wall Street Journal. “Based on what I’m seeing in the inflation data, and what I’m seeing in the economy, it’s going to take some time before I would expect to see adjustments of rates downward.”The Fed in March embarked on what’s become the sharpest round of rate hikes since the 1980s, and Fed Chair Jerome Powell last week made clear he and fellow monetary policymakers are prepared to raise borrowing costs as high as needed to restrict growth and reduce inflation that’s currently running at more than three times the Fed’s 2% target.

Doing so, he said, will likely mean a softer labor market and pain for households and businesses; but allowing inflation to remain high would cause even worse damage, he said. Williams, who as vice chair of the Fed’s rate-setting panel plays a key role steering monetary policy, said that the central bank’s decision on whether to deliver a third straight 75-basis-point rate hike next month or a smaller half-point hike will depend on the incoming data, which includes Friday’s monthly jobs report and the consumer price index reading just days before the Sept. 20-21 meeting. But September’s decision will also, Williams said, depend on policymakers’ views of where they think interest rates will need to be by the end of the year.

“If based on the data it’s clear that we need to get interest rates significantly higher by the end of the year, then obviously that informs a decision at any given meeting,” Williams said. “We’re going to need to have restrictive policy for some time – this is not something that we’re going do for a very short period of time and then change course; it’s really more about getting policies to the right place to get inflation down and keeping it in this position” to achieve the Fed’s 2% inflation goal. The Fed’s current target range for the benchmark Fed funds rate is 2.25-2.50%. In June, the last time the central bank published a summary of policymakers’ rate-path expectations, US central bankers saw rates rising to 3.4% by year end.

Source: Reuters