Fed's Lacker: Next rate hike 'should come sooner rather than later'

Jeffrey Lacker, president and chief executive officer of the Federal Reserve Bank of Richmond.
Andrew Harrer | Bloomberg | Getty Images

With the majority of market watchers expecting the Federal Reserve to stand pat on interest rates at the next meeting, Richmond Fed President Jeffrey Lacker said the next rate increase should happen sooner rather than later.

Lacker spoke on Tuesday in Newark, Delaware, at the University of Delaware 2017 Economic Forecast panel discussion.

"Rates need to rise more briskly than markets now seem to expect," he said in prepared remarks. "And the elevated uncertainty now surrounding fiscal policy, particularly the potential for substantial fiscal stimulus, suggests that our next increase should come sooner rather than later in order to reduce the risks associated with having to raise rates more rapidly later on."

Earlier this month, the Federal Open Market Committee (FOMC) decided to keep the target range for the federal funds rate at 0.5 to 0.75 percent.

According to the CME Group's FedWatch tool, the implied odds that the range will remain at current levels following the FOMC's March meeting stand at 86.7 percent. The probability of a rate hike to a range of 0.75 percent to 1 percent stands is at just 13.3 percent.