Federal Reserve Vice Chairman Richard Clarida, in his first major policy speech since being seated at the central bank, said more interest rate increases are likely warranted as the economy continues to gather strength.
In assessing current conditions, Clarida said growth broadly and with the job market in particular has surprised him.
"Based on my reading of the accumulating evidence, I believe that trend growth in the economy may well be faster and the structural rate of unemployment lower than I would have thought several years ago," he said during a speech in Washington, D.C.
While his remarks were a bit more tempered than those of his colleagues earlier this week, Clarida said he sees "further gradual adjustment" in the Fed's benchmark funds rate as likely. He said that could change if the data move and inflation turns lower. His views were fairly sanguine on inflation, saying it could remain tame even with stronger growth.
"I believe monetary policy today remains accommodative, and that, with the economy now operating at or close to mandate-consistent levels for inflation and unemployment, the risks that monetary policy must balance are now more symmetric and less skewed to the downside," he said.