MNI BRIEF: Fed's Williams Sees March Hike, QT Later This Year

Federal Reserve Bank of New York President John Williams on Friday voiced support for a March interest-rate increase and reducing the balance sheet later this year, adding that tighter monetary policy will help bring inflation back to 3% by the end of the year.

"With today’s strong economy and inflation that is well above our 2 percent longer run goal, it is time to start the process of steadily moving the target range back to more normal levels. In particular, I expect it will be appropriate to raise the target range at our upcoming meeting in March," he said in remarks prepared for a New Jersey City University webcast.

"Once the interest rate increases are underway, the next step will be to start the process of steadily and predictably reducing our holdings of Treasury and mortgage-based securities, which had grown significantly as a result of the purchases that began in March 2020," he said. "Assuming the economy develops roughly as I expect, I foresee this process getting started later this year."