SYDNEY (REUTERS) - A top US central banker on Tuesday (July 11) said he still expected one more rise in interest rates from the Federal Reserve this year and for it to start unwinding its massive balance sheet in the next few months.

Answering audience questions at an economics event in Sydney, San Francisco Federal Reserve Bank President John Williams said he believed a recent softening in US inflation was transitory and that inflation would pick up to around 2 percent over the coming year.

Williams emphasised that if inflation did not accelerate as expected, that would argue for a much slower pace of rate rises than currently projected.

He also noted that raising rates and trimming the balance sheet were complimentary forms of tightening and his projections for policy took that into account.