Investing.com -- New York Federal Reserve President John Williams said on Monday that U.S. monetary policy is well positioned to handle economic uncertainty stemming from the war in the Middle East, though he warned that risks to both sides of the central bank's mandate have increased.

"The future is difficult to see, and the risks to both sides of our mandate have increased," Williams said in remarks prepared for a Cynosure Group gathering in New York City.

Williams noted that supply disruptions and higher energy prices from the Middle East conflict are key factors shaping the global economic outlook, creating an unusual set of circumstances for Fed policymakers.

The Fed official projected U.S. economic growth between 2% and 2.25% this year with unemployment holding between 4.25% and 4.50%. He expects inflation to remain around 3% this year before returning to the Fed's 2% target in 2027, citing tariffs and energy costs as major inflation drivers.

Williams said inflation expectations remain mostly stable but cautioned that energy price increases could be worse than anticipated. "Market expectations of the future path of oil prices are fairly benign, but several plausible scenarios entail more severe dislocations in both prices and quantities," he said.

The Iran war could result in a larger supply shock with more severe consequences for inflation and economic activity, Williams added.

The remarks were Williams' first public comments since the Fed left interest rates unchanged in the 3.50%-3.75% range last week. Williams did not provide guidance on the outlook for the policy rate.

Three regional Fed bank presidents supported last week's rate decision while objecting to language in the policy statement suggesting the next move will be a rate cut. The Cleveland, Dallas and Minneapolis Fed bank presidents argued that both rate increases and decreases remain possible.