The Federal Reserve is committed to bringing soaring US inflation back down to two percent, but that will take "a few years," a top central banker said Tuesday.
The Fed this year has moved aggressively to raise interest rates to try to rein in price surges that have hit American families, and central bankers, notably Fed chief Jerome Powell, have doused any hopes they would alter course anytime soon.
New York Federal Reserve Bank President John Williams echoed Powell's tough comments, saying the benchmark lending rate will have to remain high for some time to bring demand back into line with supply.
US annual inflation ebbed slightly in July to a still-painfully high 8.5 percent, and Williams said the Fed is "absolutely committed" to achieving the two-percent goal.
"The situation is very challenging. Inflation is very high. The economy has a lot of crosscurrents. I do think it will take a few years, but we're going to get that done," Williams said in a discussion with The Wall Street Journal.
The Fed has increased the key lending rate four times this year, including two supersized 0.75 percentage point hikes in June and July, and Powell said Friday another similar increase is possible next month as well.
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Inflation was already high at the start of the year and spiked globally following the Russian invasion of Ukraine, but gas prices at the pump have been moving down in recent weeks, taking some of the pressure off American consumers.
That in turn led to a jump in consumer confidence in August, according to The Conference Board's monthly survey released Tuesday.
But the US labor market remains very strong, which the Fed fears will add fuel to the inflation fires as wages rise.
New data from the Labor Department Tuesday showed that after dipping in June, job openings rebounded slightly in July, which means there are about two positions available for every unemployed person in the country.
The Fed on Friday will get a look at one more employment report before its September 20-21 policy meeting, and will look for a slowdown after the surprise surge in July.
Williams said the September policy decision will depend on the data, but added "it's clear that we need to get interest rates significantly higher by the end of the year."
Inflation is "far too high. And that's really what we're focusing on."