Most impact wrenches are labeled or indicated as operating a recommended 90 psi:
What they don’t tell you, is that the air pressure they are referring to is what is called working air pressure. In contrast, the PSI on your air compressor is showing you static air pressure.
The difference? Working air pressure is the PSI while using the tool and static air pressure is without any tool use. The difference is substantial; depending on hosing and fittings, expect a 20-30psi drop from static while using an impact wrench.
So what should you set your compressor to for air impacts? 120 PSI. That will ensure your working air pressure is right around 90 PSI.
Also make sure to use at least 3/8 hose and either high flow fittings or run the hose directly into the impact wrench.