NEW YORK (AP) — The Federal Reserve should start raising interest rates next month to help rein in too-high inflation, Federal Reserve Bank of New York President John Williams said Friday. But he added that the rate hikes may not have to begin with as big a bang as some have suggested.

With inflation at its hottest level in two generations, the Fed is widely expected to seek to cool the economy by raising its benchmark short-term interest rate from its record low of nearly zero, where it's been throughout the pandemic. The only question has been how big and how quickly it will move, because an overly aggressive approach could choke the economy while too much caution could let inflation spiral further.

"Personally, I don't see any compelling argument to take a big step at the beginning," Williams said following an event at New Jersey City University to discuss the economy and interest rates.

Williams, who is vice chair of the committee that sets the Fed's interest-rate policy, said he sees a March increase as the beginning of a "steadily moving" process to get interest rates closer to a level where they are no longer stimulating the economy. He also said he expects inflation to fall from its current level due to a confluence of factors, including the Fed's moves and hoped-for improvements in supply-chain bottlenecks. Last month, inflation hit 7.5% in January compared with a year ago.

Williams' comments were echoed by other Fed officials, who spoke at a policy conference in New York. This support for a steady approach to rate hikes contrasted with previous statements by Federal Reserve Bank of St. Louis President James Bullard, who said the Fed should consider a half-point rate hike in one of its upcoming meetings, twice its normal increase. His comments shook Wall Street, which had been expecting a slower liftoff of rates.

Lael Brainard, a member of the Federal Reserve's Board of Governors, said that she expected the Fed would, at its next meeting in March, "initiate a series of rate increases."

Brainard is close to Fed Chair Jerome Powell and has been nominated for vice chair, the Fed's No. 2 position.

Krishna Guha, an analyst at investment bank Evercore ISI, said that Brainard "broadly endorsed" Wall Street's expectations that the Fed will hike rates six times this year.

She also said the Fed would soon turn to reducing its huge, $9 trillion balance sheet, which has more than doubled during the pandemic because of the Fed's bond purchases. She said they would likely do so more quickly than from 2017-2019, when they allowed about $50 billion in bonds to mature without replacing them.

Charles Evans, president of the Chicago Fed, said Friday that the Fed needed to adjust its low-interest rate policies, which he called "wrong-footed." But he also suggested that the central bank may not have to sharply raise rates this year.

Evans also said that high prices have mostly been caused by disruptions to supply chains and other factors stemming from the pandemic, and will likely fade partly on their own.

And given the economy's current strength, the Fed's moves shouldn't slow hiring as much as interest rate hikes have in the past, Evans added.

Higher rates can corral inflation by slowing the economy. But they can also cause a recession if they go too high, and they put downward pressure on all kinds of investments from stock prices to cryptocurrencies.

Wall Street has been fixated on almost every word from Fed officials recently, hoping to divine how quickly and by how much the Fed will move.

The mix of aggressive and moderate comments have left traders' expectations in flux. Traders were pricing in only a 21% probability of such a half-point move on Friday afternoon, down from 49% a week earlier, according to CME Group.

Williams said he did not want to get into minute details about whether market expectations are in line with his own thinking for interest-rate policy.

But he said that the big-picture movements make sense, based on expectations that the Fed will move its key interest rate closer to normal, like 2% to 2.5% by the end of next year. That's higher than the most recent forecast Fed officials gave. In December, they had a median projection of 1.6% for the federal funds rate at the end of 2023.

Evans, who typically favors lower interest rates, acknowledged that if inflation stayed high throughout this year, a larger number of rate hikes could be necessary.

Other speakers at the New York conference focused on whether the Fed had erred when it adopted its new policy framework in August 2020, which sought to keep rates low until inflation actually materialized. Previously, the Fed would typically raise borrowing costs when the economy was healthy to preempt any inflation.

Frederick Mishkin, a former Fed governor and economist at Columbia University, said the Fed had "made a serious mistake" in not hiking rates earlier to prevent inflation from taking off. Now Fed officials may have to raise rates much higher to bring prices back in line, he added.

Evans, however, defended the Fed's new policy framework by pointing out that in the past, when the Fed hiked rates to preempt inflation, such moves likely cost many jobs. And in some cases, inflation didn't materialize.

Following the remarks by Williams and Evans, the two-year Treasury note fell to 1.46% from 1.49% late Thursday. It tends to move with expectations for the Fed's policy on rates. Stocks and other areas of the bond market were also lower amid worries about a possible Russian invasion of Ukraine.