By Michael S. Derby 

Federal Reserve Bank of New York President John Williams said Friday that the outlook for the U.S. economy remains pretty good but central bankers will need to respond to unexpected events should they arise.

"We need to be ready to change our views based on the data," Mr. Williams told a group of students at an appearance in New York.

Mr. Williams's remarks were his first since the rate-setting Federal Open Market Committee meeting held over Tuesday and Wednesday. Then, officials met widely held expectations and kept their short-term federal-funds rate target rate range fixed between 1.5% and 1.75%. Officials remained upbeat about the current state of the economy, but remained mindful about risks to the outlook posed by slowing global growth and trade uncertainty.

Steady policy followed three consecutive quarter-percentage-point rate cuts, all of which were aimed at offsetting risks, and to help push up still overly low levels of inflation relative to the Fed's 2% inflation target.

At the latest meeting, the Fed, both in the comments of Chairman Jerome Powell and in its forecasts, signaled officials have no plans to change rates soon. The official forecasts penciled in steady rates for all of 2020 and then single quarter-percentage-point increases in 2021 and 2022. The Fed also maintained forecasts for steady and modest growth, low unemployment, and inflation that slowly rises back to the central bank's 2% target by 2021.

In comments about what the Fed can do to provide stimulus in a low-interest environment that curtains some of its normal maneuvering room, Mr. Williams said the central bank can say "we are not planning to raise interest rates for a long time." But Mr. Williams, who is also vice chairman of the FOMC, didn't make any direct comments about the monetary policy outlook.

Mr. Williams's outlook aligned squarely with the consensus outlook held by central bankers. In his comments before the students, Mr. Williams said that past Fed rate cuts are boosting the housing market and helping the economy remain on a positive path. He also said that inflation will move back up to the Fed's 2% target in the next year or two, and he said that inflation that bounces around on either side of the goal isn't an issue for the Fed, it is persistent misses that can be the issue.

Mr. Williams, whose comments were largely made in response to students' questions, also didn't address continuing concerns about money market rates heading into the end of the year. The Fed is providing massive amounts of liquidity to financial firms to ensure that short-term rate volatility remains modest, as it continues to react to an unexpected surge in money market rates three months ago.

Write to Michael S. Derby at michael.derby@wsj.com

(END) Dow Jones Newswires

December 13, 2019 13:52 ET (18:52 GMT)