Federal Reserve Governor Lael Brainard said Tuesday that an interest rate hike is "likely appropriate soon," but slowing inflation could change that.
Speaking at the New York Association for Business Economics luncheon on Tuesday, Brainard also said recent inflation numbers are lower than expected and there is little sign of wage inflation heating up.
The Fed did not raise the bank's key interest rate in May, after raising rates in December and March. An interest rate hike is widely expected in June, a move that would push the target range up to 1 percent to 1.25 percent.
Brainard, a member of the policymaking Federal Open Market Committee, said President Donald Trump's tax cuts could equal 2 percent of GDP in the first few years, and the cuts would boost demand at full employment. The Trump administration said its pro-business agenda would hit 3 percent GDP.
Brainard's comment came after Dallas Fed President Robert Kaplan told CNBC earlier Tuesday he does not think the economy is about to take off. He sees
"Two things drive GDP: growth in the labor force and growth in productivity," he said on "Squawk Box." "The problem is labor force growth is very sluggish. And my own judgment and our economists at the Dallas Fed think it's going to continue to be sluggish the next 10 years because the population is aging and labor force
The FOMC's next meeting is June 13-14.
—CNBC's Jeff Cox contributed to this report.