Don't fear the hawk. That's what St. Louis Fed President James Bullard told CNBC on Friday—saying a tighter tack on Fed monetary policy does not have to be bad for the economy.
"It means the committee could be more confident that the economy is going to improve in the future and handle the higher [interest] rates which will eventually come," he said on "Squawk Box," ahead of Fed Chair Janet Yellen's Friday morning address at the central bank's monetary symposium at Jackson Hole, Wyoming.
Bullard said he's sticking with his prediction for rate hikes to start late in the first quarter of 2015. He won't be a voting member of the Fed's policy committee again until 2016.
Bob McTeer, former president of the Dallas Federal Reserve Bank, thinks the Fed should consider raising rates sooner than that.
"Time has passed. We've moved toward the goals in the right direction, and I think maybe that interest rate move ought to be a litle earlier than the middle of next year when it was going to be in the middle of next year," McTeer said on "Squawk on the Street."
The financial markets have been trading more dovishly than the Fed policy committee's median estimates, Bullard warned—adding that investors are expecting rates over the long haul to remain lower than the central bank's forecasts.
Whenever the central bank decides to finally raise rates, though, it won't likely be a surprise to investors, David Spika, a senior vice president at The Westwood Funds, said on "Squawk on the Street."
"This isn't 1994 where all of the sudden the Fed comes out of the blue and starts raising the Fed funds rate and everybody scrambles for the exits. We know it's going to happen. This is the most transparent Fed we've ever had," Spika said. "The market is going to price [the hike] in well ahead of time, and I don't see there being huge disruptions ... I don't think we should expect some massive sell off based on the fact that interest rates are going up."
On the economy, the rebound in economic growth in the second quarter was a relief and showed that the contraction in the first quarter was an anomaly due to the bad winter weather, Bullard said.
"I'm sticking right now with end of the first quarter [rate] liftoff," he said. "But that is very dependent on my forecast, which has us growing 3-plus percent into the second half and has nonfarm payrolls and other labor market indicators continuing to improve."
Bullard said he thinks the Fed has been too pessimistic on the job market.
"Unemployment has come down dramatically," he continued. "I expect more payroll growth, 200,000-plus in the reminder of the year." He predicted a jobless rate of 5.8 percent by the end of 2014, and said 5.2 percent would not be out of the question a year from now.
The topic of Yellen's speech was the job market—the strength of which has been a source of discourse at the Fed.
On both sides of that debate, hawkish Kansas City Fed President Esther George and dovish San Francisco Fed President John Williams argued their positions on CNBC on Thursday. George said she didn't want to be behind the curve in beginning to normalize rates, while Williams said expectations for a summer 2015 start are reasonable.
The minutes from the central bank's July meeting, released Wednesday, certainly reflected those two camps at a time when policymakers are actively talking about whether interest rates should be increased sooner rather than later.
—By CNBC's Matthew J. Belvedere