San Francisco Federal Reserve President John Williams on Tuesday downplayed a recent soft patch in the economy and said the Fed could raise its benchmark interest rate at any meeting.
"Every (policymaking) meeting is on the table," Williams said in a speech at the New York Association for Business Economics.
He added that rates should be hoisted gradually, and sooner rather than later.
"I see a safer course in a gradual increase, and that calls for starting a bit earlier," Williams said.
Many economists expect the central bank to raise the Fed funds rate in September, though some say that could be pushed back if inflation doesn't show some signs of picking up.
Williams' remarks are noteworthy because he generally is considered a "dovish" member of the Fed's policymaking committee, or more concerned about promoting growth than in heading off inflation.
He acknowledged that inflation remains well below the Fed's 2% annual target. But he largely blamed low oil prices and a strong dollar that's pushing down the costs of imports. Both, he said, are temporary factors.
Williams said the Fed should not wait until annual inflation reaches 2% before raising its benchmark interest rate for the first time since 2006.
"It usually takes a year or two for policy to have its full effect, so decisions need to remain with that in mind," he said. "It's like driving a car: You take your foot off the gas when approaching an intersection. The data convince me that inflation will move back toward our target as the economy strengthens and reclosing on full employment."
Economists estimate that the economy contracted by about 0.6% in the first quarter, because of wintry weather, the lingering effects of a labor slowdown West Coast ports, a strong dollar and cutbacks in oil-related investment.
Williams, however, said the poor showing repeats a pattern of weak first-quarter growth and will likely yield a strong bounce-back in coming months.
"My bottom line on the economy is: The fundamentals are sound," he said. "The underlying momentum in job growth remains solid. I expect wage growth to continue to rise and consumer confidence to continue to pick up steam."