Federal Reserve’s “No. 3” supports holding rates steady: Inflation is “absolutely too high,” but other indicators have not triggered alarms.

According to Golden Ten Data APP, John Williams, President of the New York Federal Reserve—holding a permanent voting right and known as the “number three” at the Federal Reserve—has stated that he agrees with the Fed’s previous statements, namely that now is the time to gather information on price risks.

On Friday, Williams said at an event held by the European Central Bank (ECB) in Frankfurt that inflation is “absolutely too high,” but so far other indicators have not sent worrisome signals.

Williams said that monetary policy “does play a key role in making sure these relative price shocks do not become broader or more persistent inflation.” “Inflation expectations remain firmly anchored. The wage growth we are seeing is consistent with a 2% target.”

Last month, Federal Reserve officials kept interest rates unchanged, stating that “gathering more information” would help them determine the optimal level of policy. The hold decision passed with 10 votes in favor and 2 against, following a unanimous vote in September to raise the benchmark rate by 25 basis points to the 3.75% to 4% target range.

Since that meeting, several policymakers have emphasized in public remarks the need for further rate hikes but advocated a gradual approach. These public comments followed remarks by Chairman Kevin Walsh—who noted the strong economic performance and warned of persistent inflation, but still did not reveal his views on the future rate path.

Williams said, “I believe the FOMC statement at our last meeting accurately indicated that now is the appropriate time to gather more information, which will help us determine what policy stance is suitable to ensure inflation returns to the 2% target in a timely manner.”

The Federal Reserve’s preferred inflation gauge—the Personal Consumption Expenditures (PCE) Price Index—rose 3.6% year-on-year in September, while the core inflation index excluding food and energy also increased. Data also showed that in the quarter ending September, the U.S. economy posted its fastest growth rate in a year.

“There are several themes that are truly interesting, both for us and globally: a very unusual set of relative price shocks is affecting economies, while at least our economy has shown great resilience amid these shocks,” Williams noted.

He made these comments just days after the Democratic Party secured a decisive victory in Tuesday's midterm elections, taking control of Congress. Federal Reserve watchers say this shift may provide the central bank with protection, giving officials more room to combat inflation without political interference.