With fiscal stimulus and favorable financial conditions providing tailwinds to the US economy, further gradual increases in interest rates will best foster a sustained economic expansion and achievement of the Federal Reserve’s dual mandate, New York Fed President John Williams said in a speech for a gathering of international bankers in Bali, Indonesia.

“I expect real GDP to increase by around 3 percent this year and by 2.5 percent in 2019. Assuming this forecast comes to fruition, this will be the longest expansion in US history based on data going back over 150 years, he added. This above-trend pace of growth should lead to continued solid job gains and further declines in the unemployment rate.

“I expect the unemployment rate to edge down to slightly below 3.5 percent next year, the lowest level in nearly 50 years.” Regarding price inflation, it is expected to move up a bit above 2 percent.