John Williams, New York Fed President said that the Federal Reserve would raise interest rates in the next year to signal its optimism about the nation’s recovery.

“I go into next year feeling [like]This is an excellent baseline outlook. In this interview, Williams spoke to Steve Liesman at CNBC about “The baseline outlook is very positive.”Squawk Box.”

“I am optimistic about the strong improvement in the labor market. Williams stated that you are seeing the unemployment rate drop quickly.

He made these comments after earlier this week, the Fed said it expected three rate rises in 2022. Fed cut rates to near-zero levels in March 2020in support of the economy during the Covid-19 pandemic. In addition, this week the central bank stated that they would aggressively dial back its bond-buying program.

This rate prediction comes amid an increase in U.S. Inflation.

The consumer price index — which tracks the price of everything from cars to food to rent — surged 6.8% in November on a year-over-year basis. It is the largest acceleration in inflation since 1982. The producer price index — another inflation measure that tracks wholesale prices — increased last month by 9.6%, its fastest pace on record.

Williams stated that “We are very focused on inflation” because it is currently too high. “We are determined to see inflation return to our goal of 2% in the longer term.”

Williams pointed out that Williams did not believe the Fed needed to speed up its tapering of the asset purchase program. This is to reduce the current inflation spike.

Wednesday’s announcement by the Fed that $60 billion of bonds will be purchased per month, starting January 1, was a major milestone. It’s now buying half as many bonds per month than it did before November. The Fed is now on track to complete its program in March.

Williams stated that Williams doesn’t believe there is any benefit in trying to accelerate it further. “We like to do things in a way that’s very carefully studied, very carefully communicated … without creating disruption in markets.”