Richmond Federal Reserve President Jeffrey Lacker told CNBC Friday that he "wouldn't be surprised" if the central bank raised interest rates before the end of the year.
In an interview at a banking meeting hosted by the Richmond Fed, Lacker said ending the Fed's bond-buying stimulus program also "deserves consideration."
He gave no timetable for the rate hikes and other actions. "The exact sequencing of that is something we’re hashing out and trying to think through," he said.
At some point the Fed will "withdraw monetary stimulus by not reininvesting mortgage-backed security proceeds and then going further and beginning to sell assets" and raising interest rates, Lacker said.
These actions are warranted this year because of concerns about inflation and a need to "normalize interest rates" as the economy improves.
He said his greater concern is rising inflation, and controlling it in the next nine months "will be critical for us."
Lacker's comments echoed those by another inflation hawk, Minneapolis Fed President Narayana Kocherlakota, who told the Wall Street Journal Thursday that the Fed could raise benchmark borrowing costs, which are now close to zero, by three-quarters of a percentage point by the end of the year,
Kocherlakota, a voter on the Fed's policy-setting panel this year, also said the Fed's latest stimulus program should end as scheduled in June.
Meanwhile, New York Fed President William Dudley, considered a more "dovish" member of the central bank, said Friday that it isn't time for the Fed to reserve course even though US jobs growth is likely to rise more rapidly in the coming months.
"We are still very far away from achieving our dual mandate of maximum sustainable employment and price stability," Dudley said in a speech. "Faster progress towards these objectives would be very welcome."
The president of the New York Fed has a permanent voting seat on the Fed.
Also Friday, Philadelphia Fed President Charles Plosser, an inflation hawk, said the central bank "should not be too sanguine"in believing that the time to reverse easy monetary policy is a long way off and that it will be gradual.
"A stronger rebound in the economy or inflation than some now expect could require policy actions to be taken sooner and more aggressively than many observers seem to be anticipating," Plosser said.
Allowing monetary policy to fall behind the curve would result in greater inflation and economic instability in the future, he warned.
Plosser, a voter on the Fed's policy-setting committee, did not specify when he thinks the Fed should reverse course. At its last meeting, the Fed voted unanimously to continue as planned with its $600 billion bond purchase program, designed to lower interest rates and stimulate growth, which is scheduled to end in June.