(Bloomberg) -- Federal Reserve Governor Christopher Waller said the US economy is adapting to higher interest rates, but more increases in borrowing costs are necessary to bring inflation back to the central bank’s 2% target.

“We are seeing that effort begin to pay off, but we have farther to go,” Waller said Wednesday in remarks prepared for delivery at Arkansas State University. “And, it might be a long fight, with interest rates higher for longer than some are currently expecting.”

US central bankers raised the benchmark lending rate a quarter point last week to a range of 4.5% to 4.75% and said “ongoing increases in the target range will be appropriate.” The move was a step down from the Fed’s previous increases, including a half-point increase in December and four jumbo-sized 75 basis-point hikes prior to that.

Fed officials have taken some encouragement from signs of a slowing pace of inflation, while warning their job isn’t done and their tightening bias remains in place.

“Some believe that inflation will come down quite quickly this year,” Waller said, adding that he would welcome that outcome. “But I’m not seeing signals of this quick decline in the economic data, and I am prepared for a longer fight to get inflation down to our target.”

Fed officials in December forecast rates peaking at 5.1% in 2023, according to their median projection. New York Fed President John Williams earlier Wednesday said “that’s still a reasonable view.”

Waller didn’t discuss the pace of tightening or where he sees rates peaking in the text of his remarks. He made clear he was not happy with the current level of price pressures.

“Though we have made progress reducing inflation, I want to be clear today that the job is not done,” Waller said.

Waller flagged the strong labor market as a risk for inflation but also a source of continuing support for the US economy. US employers added a much stronger than expected 517,000 new jobs in January, driving the unemployment rate down to 3.4%.

“Such employment gains mean labor income will also be robust and buoy consumer spending, which could maintain upward pressure on inflation in the months ahead,” Waller said.

The Fed governor said he expects growth to slow further in the first quarter of this year, but still show positive growth, “supported by a strong labor market and by encouraging progress in lowering inflation,” he said.

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