A senior Federal Reserve official said that although the outlook has become more optimistic, the US economy is not yet ready for the central bank to start withdrawing its huge monetary support.

With the financial market highly sensitive to Fed policy, the President of the Federal Reserve Bank of New York, John Williams, made the above comments on Monday. The economic forecasts of central bank officials last week indicated that they expect to raise interest rates in 2023, a year earlier than previously predicted.

Williams said that the economy “has been improving” and these are some of his most optimistic remarks since the pandemic began. But he insisted that the Fed will stick to the terms of its monetary policy framework launched in August last year, which sets a high standard for tightening policy.

“It is clear that the economy is improving rapidly and the medium-term prospects are very good.

“However, the progress of the data and conditions is not enough for the Federal Open Market Committee to change its monetary policy stance to provide strong support for economic recovery.”

Since the last FOMC meeting, these comments seem to be more cautious about the prospect of rapid policy changes than the comments of other regional Fed presidents.

On Friday, St. Louis Fed President James Brad sparked a heated discussion in an interview with CNBC. Sold out He hinted that the central bank may be preparing to raise interest rates as early as next year.

Williams said that until full employment has been achieved and the inflation rate has risen to 2% and “hopefully” will moderately exceed the target for some time, interest rates will not be raised.

He also said that unless “substantial further progress” is made in these areas, the Fed will not reduce its $120 billion monthly asset purchase plan.

“When considering future adjustments to its position, the Federal Open Market Committee has determined the conditions and measures to provide information for its decision-making,” he said.

On Monday, at an event hosted by the Think Tank’s Official Monetary and Financial Institutions Forum, Brad reiterated the need for the Fed to start considering reducing bond purchases in the event of rising inflation.

Dallas Fed President Robert Kaplan also expressed a similar tone in the same incident.

“It will be healthier as we progress towards fighting the pandemic and achieving our goal of beginning to adjust these purchases-U.S. Treasuries and mortgage-backed securities,” Kaplan said.