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© Reuters. FILE PHOTO: 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/Carlo Allegri/File Photo

By Jonnelle Marte

(Reuters) – The U.S. economy is rebounding rapidly from the crisis caused by the coronavirus pandemic, but more progress is needed before the Federal Reserve should begin to scale back some of the robust support it is providing, New York Fed president John Williams (NYSE:) said on Monday.

The recent inflationary pressures appearing as some businesses struggle to keep up with a surge in demand should also subside as the economy stabilizes, the Fed official said.

“It’s clear that the economy is improving at a rapid rate, and the medium-term outlook is very good,” Williams said in remarks prepared for a virtual event with the Midsize Bank Coalition of America. “But the data and conditions have not progressed enough for the FOMC to shift its monetary policy stance of strong support for the economic recovery.”

Bolstered by rising vaccinations and strong fiscal support, the U.S. economy could grow by 7% this year after adjusting for inflation, Williams said.

The rapid opening of the economy is creating imbalances between supply and demand and leading to temporary price increases, but inflation could level off over time, he said. Williams said he expects inflation to come down from around 3% this year to close to 2% next year and in 2023.

With more than 7 million jobs lost when compared to before the pandemic, the U.S. economy still has a long way to go before it is back at full strength, the policymaker said. Further job gains are expected, but it could take time for employers to fill open positions, he said.

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