The U.S. economy could reach a bottom in May or June and see a strong recovery in the second half of the year, New York Federal Reserve Bank President John Williams said Wednesday, adding that there is a lot of uncertainty in the forecast and that the central bank is considering a range of scenarios.

"Let's just not forget this is an extreme decline in economic activity and an enormous hardship for people in this country," Williams said during an interview with Bloomberg TV. "So even if we're starting to see perhaps you know, stabilization there in terms of the economy and maybe a little bit of a pickup, we're still in a very difficult situation."

Williams said Fed economists are using various sources of data, including social media and information on how much Americans are driving, to develop forecasts that are slated to be released at the June policy setting meeting.

The policymaker said the pandemic could have large effects on demand and that he expects inflation to stay low over the next year or so.

Williams said officials are evaluating which steps to take to support the economy through the various scenarios that could play out in the coming months. He said yield curve control is one tool that could "potentially complement" the Fed's use of forward guidance and other tools, echoing remarks made by Fed Vice Chair Richard Clarida last week.

"This is something that obviously we're thinking very hard about," he said. "We're analyzing not only what's happening in other countries but also how that may work in the United States." 

Meanwhile, expanded unemployment benefits were an appropriate policy during the coronavirus shut down but would not be appropriate as the recovery takes hold, St. Louis Federal Reserve president James Bullard said on Wednesday.

Instead policymakers should consider incentives for workers to return to jobs if asked. "That 100% replacement rate is totally appropriate during the pandemic adjustment...It would not be appropriate as we come out of it," Bullard said. "You want to incentivize people" to work. Workers are currently given an extra $600 per week in unemployment, but the additional benefit expires at the end of July.