By Michael S. Derby 

Federal Reserve Bank of New York President John Williams said on Bloomberg's television channel Wednesday the worst of the economy's decline from the coronavirus crisis may be over, even as he warned hard days still lie ahead in a climate of considerable uncertainty.

"Based on what we are seeing now, I think we are pretty close, maybe May or June will be the low point right now based on the data we are seeing, " Mr. Williams told the television channel. "But let's not forget this is an extreme decline in economic activity, an enormous hardship for people in this country. So even if we are starting to see perhaps stabilization there in terms of the economy and maybe a little pickup, we are still in a very difficult situation."

But even as that cloud hangs over the nation as it navigates a broad shutdown in activity aimed at reducing the health threat posed by the coronavirus, Mr. Williams sees space for a good rebound, as central bank policy works to return the economy to the strength seen at the start of the year.

"We are kind of in a really good place in terms of, maybe we are near the bottom in terms of the economic downturn, and hopefully we'll start seeing improvement in coming months," Mr. Williams said. "I expect to see a pretty significant rebound in the second half of this year."

Mr. Williams, who also serves as vice chairman of the rate-setting Federal Open Market Committee, said the Fed will consider all available tools to help the economy. He also said continued support from the government is critical to this effort as well. In response to the crisis, the Fed slashed its rate target to near zero levels and said the cost of credit would remain very low for some time to come, ramped up bond buying and launched facilities to extend credit to large parts of the economy.

The Fed is also considering other actions. One option is to dig into the financial crisis toolkit and offer firm guidance about the future direction of interest rates. The Fed is also considering what's called yield-curve control, where the central bank takes action to actively manage borrowing costs across different maturities.

"Yield-curve control, which has now been used in a few other countries, is, I think, a tool that could complement, potentially complement, forward guidance and our other policy actions," Mr. Williams said. "This is something we, obviously, are thinking very hard about. We are analyzing not only what's happened in other countries, but also how it may work in the United States," he said.

Mr. Williams was noncommittal on the details and timing of any new efforts like yield-curve control. "I don't have anything that I can say about what will or will not happen. But really, my view is, the focus is always on, how do we best use the tools we have...to achieve our goals."

In his comments to Bloomberg, Mr. Williams also said he expects inflation to remain quite low "over the next year or so." He also said that forecasts to be submitted at next month's FOMC meeting were as much about considering different possible outcomes for the economy as forming a baseline outlook.

Write to Michael S. Derby at michael.derby@wsj.com

(END) Dow Jones Newswires

May 27, 2020 12:03 ET (16:03 GMT)