Investing.com -- Federal Reserve Bank of New York President John Williams said today that the central bank does not need to adjust short-term interest rates, despite inflation risks linked to the Middle East war and other factors.

Williams told Yahoo Finance that monetary policy is "exactly in the right place." He said he does not see any need to raise or lower interest rates at this time and does not see a clear direction for future rate moves.

The Fed official noted that higher energy prices are driving up costs and inflation. He said inflation has risen "quite a bit" and remains elevated in the goods sector and energy-related areas. Williams also pointed to elevated inflation in technology due to artificial intelligence.

Williams attributed much of the current inflation to tariffs and computer chips. He expects inflation to peak in the next few months but remain elevated through the rest of the year.

The economy is growing at a solid pace of around 2%, Williams said. He described the job market as healthy and stabilized.

Williams said he is not worried about persistent impacts on inflation so far and does not expect a long-running increase in energy prices. He expressed hope that energy prices will stabilize.

The New York Fed president said upside risks to inflation have increased. He noted that monetary policy is modestly restrictive right now and that the Fed is not far from a neutral interest rate.

Williams said the Fed will need to respond if conditions change. He expects inflation to be lower next year.