(Reuters) - The U.S. economy is performing well and the Federal Reserve needs to move soon to raise interest rates, a top Fed official said on Friday.
Kansas City Federal Reserve Bank President Esther George said the central bank should raise rates only when the economy is on sure footing, and is prepared to withstand an environment in which rates are going up.
George said the Fed risks waiting too long to make its first move on hiking rates.
“We are on a good track and it is time for the Fed to continue the process of talking about getting interest rates back to a more normal level,” Esther said in a speech to a business group in Nebraska.
George said she thought next year would be a good time to raise rates, though she would not specify a time, only saying the Fed needs to move sooner than it’s currently indicating.
In a question and answer session after, George said she believes the Fed needs to move quickly and gradually so as to not disrupt the market.
“Having been at zero interest rates with a larger balance sheet has created some distortions in markets,” George said. “So as we move to higher interest rates, there could be some volatility in our markets as they try to adjust to those things.”
Reporting by Michael Flaherty; Editing by Chizu Nomiyama