John Williams, president and chief executive officer of the Federal Reserve Bank of New York, speaks during an Economic Club of New York (ECNY) event in New York, U.S., on Wednesday, March 6, 2019.

The U.S. economy is heading into a "new normal" of slower growth that likely will keep monetary policy restrained, New York Federal Reserve President John Williams said Wednesday.

After a year where the economy accelerated close to 3 percent, GDP likely will slow to 2 percent this year despite a mostly favorable backdrop domestically, the central bank official said in a speech to the Economic Club of New York. He cited three constraining factors: a global slowdown, geopolitical uncertainty and tighter financial conditions.

"Now, I know this talk of slowing growth is causing uncertainty, some hand-wringing, and even fear of recession. But slower growth shouldn't necessarily come as a surprise," Williams said in prepared remarks. "For quite some time, the economic fundamentals have pointed to GDP growth much lower than what we saw in the 1990s, for example."

However, "slower growth isn't necessarily cause for alarm," he said, calling the labor market "very strong" and saying the "overall picture of the economy is about as good as it gets" with low unemployment, "sustainable growth" and inflation right around the Fed's 2 percent objective.

In that picture, the Fed needs to be data dependent and can be patient.

"The base case outlook is looking good, but various uncertainties continue to loom large. Therefore, we can afford to be flexible and wait for the data to guide our approach," he said.

The Fed raised its target interest rate four times in 2018 and expects two more hikes this year, though the market is expecting the policymaking Federal Open Market Committee to stand pat with the funds rate in a target range of 2.25 to 2.5 percent.

"We'll consider the full range of data, the headline statistics, the market indicators, and we'll listen to our business contacts on the ground, as we aim to keep the economy on its current course of a strong labor market, sustainable growth, and 2 percent inflation," Williams said.