(Bloomberg) -- Federal Reserve Bank of New York President John Williams said that while prices have come down in a still-solid economy, there’s still room to go for inflation to come into the Fed’s 2% target.

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There has been “a significant decline in inflation toward our 2% goal. Obviously [we’re] not quite there yet,” Williams said in a Barron’s interview published Thursday. “I expect it will be appropriate over time to bring the fed-funds rate down closer to more-normal or neutral levels.”

Williams reiterated that he expects inflation — as measured by the personal consumption expenditures index — to fall to 2.25% for the year. He also sees US growth of 2.5% next year and the labor market to show “a little further cooling.”

The cooling labor market and lower inflation show that monetary policy is restrictive today, Williams said, adding that he expects rates to be lower by the end of next year. And while jobs conditions are softening, there are no signs of a recession on the horizon, he said.

Monetary policymakers lowered rates by a quarter percentage point earlier in the month following an outsize reduction in September that kicked off a global easing cycle. Fed Chair Jerome Powell is among officials who have called for a careful approach to future rate cuts.

The election of Donald Trump could pose a potential risk to the rate path. Since Nov.6, some traders and economists expect a slower rate easing path next year as Trump’s previously touted tariffs come into effect and pressure up prices domestically.

The biggest risks going forward according to Williams are productivity weakening, geopolitical issues that could disrupt the global economy and China’s struggle to maintain growth momentum, citing “fragilities and vulnerabilities” in the economy.

The Asian nation’s challenges “could have ramifications for global demand” and can “affect inflation around the world,” Williams said.

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