NEW YORK, May 28 (Reuters) - Federal Reserve Bank of New York President John Williams said on Thursday central bank monetary policy is in the right place given the outlook, adding he expects inflation to be high in the near term with the pressures easing later in the year.

"Right now monetary policy for the Fed is, is right where we want it to be," Williams said at the Reykjavík Economic Conference in Iceland. 

Fed policy is "slightly restrictive" and "taking a longer view...we are well positioned to continue to learn what happens with the conflict, with other data, before we need to make a decision" on changing interest rates, he said.

The central banker, who is also vice-chair of the interest-rate-setting Federal Open Market Committee, said there are scenarios where the Fed could go up or down with rates and that persistently high levels of inflation could call for a tightening in rates, while adding that has not happened yet. 

Williams said in the near term inflation will be elevated for a time amid President Donald Trump's sharp import tax increases and the energy shock caused by the Middle East war. 

"I think in the next few months we're going to see, continue to see very elevated inflation with (personal consumption expenditures) inflation around close to four, around 4%, core inflation above 3% like we're seeing today." But he added as tariff impacts fade and the energy shock eases, inflation could ease. He added it's possible price pressures could peak in the next few months. 

Financial markets broadly see the Fed on hold for some time but have also begun to weigh the prospect of an increase in what is now a 3.5% to 3.75% federal funds rate target range. Inflation pressures have been above target for years and there's increased worry the latest round of shocks could start to unmoor inflation expectations and set the economy up for even more price pressure gains. 

Williams said that near-term inflation expectations are up and that that is not surprising given recent events, but longer-term expectations are stable. He said it's critical for the Fed to keep expectations stable. 

The official also said the U.S. economy is "solid" right now and "the underlying labor market is doing quite well."