CLAYTON, Mo., Feb 21 (Reuters) - The U.S. economy is gaining enough traction for the Federal Reserve to start to raising interest rates later this year or in early 2015, a top Fed official said on Friday.
“It should be a good year for the U.S.: there’s no reason why it wouldn’t be, even if some of the data were softer over the December, January, February timeframe,” St. Louis Federal Reserve Bank President James Bullard told reporters after speaking to the St. Louis Forum, a group of professional women.
Bullard said that in December he had thought it would be appropriate for the Fed to start raising rates in late 2014, sooner than most of his colleagues, who expect rates to rise sometime in 2015.
“There is a spate of weaker data here, so now when I go to the next forecast round I may be forced to push mine over to 2015 as well,” he said.
Though his expectation for rate hikes to start within the year is not widely shared by his colleagues, his forecast for the unemployment rate last year was perfectly accurate, he said.
This year, he expects unemployment to fall below 6 percent by year’s end, pushing inflation towards the Fed’s 2-percent goal this year and above it next year.