(Reuters) - New York Federal Reserve President John Williams said on Friday the Trump administration's current trade policies will accelerate inflation this year, while adding that it's critical for the U.S. central bank to prevent longer-run expectations of price pressures from becoming unmoored.

"It's hard to know with any precision how the economy will evolve," Williams said in prepared remarks to the Puerto Rico Chamber of Commerce. "Given the uncertain effects of recently announced tariffs and other policy changes, there is an unusually wide range of outcomes that could transpire."

In light of that uncertainty tied to President Donald Trump's moves to impose hefty import taxes on a wide range of U.S. trading partners, the economy's strong start to the year is likely to give way toward something less favorable, Williams said. The Fed will need to watch the data carefully during this period to know how to react with monetary policy, he said.  

Williams said he expects the tariffs to push inflation up to between 3.5% and 4% this year, which would represent a marked rise in price pressures from the current level of the Personal Consumption Expenditures Price Index, which was 2.5% on a year-over-year basis in February. The PCE is the Fed's main inflation gauge. 

"Given the combination of the slowdown in labor force growth due to reduced immigration and the combined effects of uncertainty and tariffs, I now expect real GDP growth will slow considerably from last year's pace, likely to somewhat below 1%," while the jobless rate should rise from its current level of 4.2% to between 4.5% and 5%. 

Williams noted that he remains committed to getting inflation back to the Fed's 2% target. He said while short-term inflation expectations have risen, longer ones have remained in check, and it's critical that the Fed keep it that way. 

His outlook of slowing growth, rising unemployment and much higher inflation is a difficult one for the Fed, as it does not argue for a clear monetary policy response. 

Financial markets widely expect a string of Fed interst rate cuts aimed at protecting the economy from downside risks, while U.S. central bank officials have in recent comments flagged the importance of not letting inflation get out of control. Most have suggested they see no imminent reason to change the benchmark interest rate, which is currently set in the 4.25%-4.50% range. 

"Monetary policy is in the right place to manage those risks as best we can" and its "modestly restrictive" level is the right one given the current level of inflation, Williams said. 

Where the Fed is now on rates "gives us the opportunity to assess incoming data and developments, and ultimately positions us well to adjust to changing circumstances that affect the achievement of our dual-mandate goals," he said.