The Federal Reserve should raise interest rates “sooner rather than later” to avoid having to step on the gas and push rates sharpy higher, said Dallas Fed President Rob Kaplan on Monday.
“It is my view that moving sooner rather than later will make it more likely that future removals of accommodation can be done gradually — that is, reduce the likelihood that the Fed will get ‘behind the curve’ and feel the need to remove accommodation more rapidly,” Kaplan said in an essay posted on the Dallas Fed’s website.
Kaplan is a voting member on the Fed’s policy-making committee this year.
Fed officials will meet again on March 14-15 to set interest rates. Kaplan’s comments suggest he, along with some other regional bank presidents, will argue in favor of a rate hike at the meeting.
But Fed chief Janet Yellen and her inner circle have not come out in favor of a move in recent weeks.
Yellen will testify to Congress on rate policy on Tuesday and Wednesday.
Experts said she is likely to back a go-slow approach, leaving March on the table but making a June move more likely.
Read: Why Yellen will hold her interest-rate cards close in front of Congress
In his blog post, Kaplan stressed the Fed could move in a “gradual and patient manner.”
He said there was still some slack in the U.S. workforce and inflation would not pick up sharply, only hitting the central bank’s 2% target over the medium-term horizon.
Kaplan, who keeps a close eye on oil and gas markets in the U.S., said he expects the price of oil to “continue to firm.”
As a result, he forecast that U.S. crude oil production is likely to “steadily increase” as the year unfolds.
He said this estimate is based on oil prices ranging between $55 and $60 per barrel. March West Texas Intermediate crude
settled at $52.93 a barrel Monday on the New York Mercantile Exchange.