By Michael S. Derby

NEW YORK (Reuters) - Federal Reserve Bank of New York President John Williams said Friday he expects the central bank to deliver more interest rate cuts but noted that what happens will be driven by incoming data, amid a policy that is still providing restraint on the economy's momentum.

Even with this week's rate cut Williams thinks "we're pretty restrictive" with monetary policy, meaning short-term rates are continuing to restrain the economy, which should help further an easing in inflation pressures, he told CNBC in an interview.

As for where the Fed goes next with monetary policy, "the baseline trajectory is moving down towards neutral rates," Williams said, suggesting some sort of rate cut combinations were still in his outlook.

"We need to be data dependent and we have time to really assess the data, assess what's happening, and come to the best judgments based on the data, the outlook and the risks to achieve our goals," he said.

"I think we're in a great place, well positioned" for what lies ahead, he said.

He spoke on CNBC Friday following this week’s Federal Open Market Committee meeting, at which the officials met market projections and cut their overnight target rate by a quarter percentage point, to between 4.25% and 4.5%. The Fed also dialed back expectations of how much it will cut rates next year.

UNCERTAIN OUTLOOK

Williams noted in his appearance that the outlook for inflation and many other things was attended by considerable uncertainty at this point.

Many economists have warned that the tariff and deportation regime favored by President-elect Donald Trump is likely to put further pressure on inflation, although Fed leader Jerome Powell said after the FOMC meeting that new central bank forecasts projecting a slower move back to 2% inflation are driven by the data and not expectations of future government policy.

Williams acknowledged that the impact of Trump's agenda was starting to influence his outlook and that some of what Trump wants on immigration front may already be happening.

"In my own personal forecast, I have incorporated some thinking about where fiscal policy may be, immigration and other policies, because those are important drivers to thinking about the economic outlook. But I would just emphasize [there's] just a lot of uncertainty about what those effects will be," the official said.

Williams spoke after the release of November inflation data that showed ongoing persistence in price pressures. The November personal consumption expenditures price index was up by 2.4% from a year ago, from October's 2.3% rise, while the PCE price index stripped of food and energy was unchanged at a 2.8% rise.