Minneapolis Federal Reserve Bank President Neel Kashkari, the lone dissenter against the U.S. central bank's decision this week to raise interest rates, said on Friday the U.S. economy is still falling short on employment and inflation.

Even after the data support tightening, Kashkari said in a statement, the Fed should wait on raising interest rates until it publishes a detailed plan for how and when it will reduce its $4.5 trillion balance sheet.

"The announcement of our balance sheet plan could trigger somewhat tighter monetary conditions," Kashkari said, resulting in the equivalent of a rate hike of unknown size. "After it has been published and the market response is understood, we can return to using the federal funds rate as our primary policy tool, with the balance sheet normalization under way in the background."

Kashkari's approach appears to differ sharply from the one embraced by Fed Chair Janet Yellen and the majority of her fellow policymakers, who want to wait on any reductions in the balance sheet until they have lifted rates well away from zero.

The Fed this week raised its target range for the federal funds rate to 0.75 percent to 1 percent, and Yellen said that while policymakers had discussed what to do about the balance sheet, they had come to no decisions.

The Fed built its portfolio over years of bond-buying in an effort to stimulate hiring and investment when interest rates were already at rock-bottom. It says the system is still working to keep longer-term borrowing costs lower than they otherwise would be.

Kashkari said in his statement that because inflation is still short of the Fed's 2-percent target and the labor market is still showing signs of slack, the Fed's prior level of rates was appropriate.

In another sign of his departure from the mainstream at the Fed, Kashkari said he sees little advantage in starting rate hikes now so that they can be gradual, a key justification by Yellen for acting now even as she herself sees more room for improvement in the job market.

"If we are surprised by higher inflation than we currently expect, we might need to raise rates more aggressively," he said. "Some argue that gradual rate increases are better than waiting and having to move aggressively. It isn’t clear to me that one path is obviously better than the other."