The Federal Reserve is progressing toward its dual mandate of stable prices and maximum employment and should raise interest rates in the near future, said John Williams, president of the Federal Reserve Bank of San Francisco.

"We always have to be looking through the front window” in setting monetary policy since it works on the economy with a lag, Williams said, speaking on Bloomberg Television with Michael McKee on Monday. "My own view is that the economy is still on a good trajectory.”

Officials held off raising interest rates last month amid growing risks to their outlook for economic growth and inflation, in large part from a slowdown in China, minutes from their gathering showed. Policy makers meet again Oct. 27-28 and in December.

Despite risks from abroad, Williams said that he expects inflation to stabilize and growth to persist, allowing for a rate increase "in the near future."

Forecasts prepared for the Sept. 16-17 Federal Open Market Committee meeting showed that 13 of 17 officials view a rate rise as warranted this year. Investors are less optimistic, following a string of tepid readings on the economy. Trading in federal funds futures shows they see the probability of a move by the December FOMC of around 32 percent, based on an effective funds rate after liftoff of 0.375 percent.

Williams, who votes on policy this year, wouldn’t say whether he supports an October rate hike and reiterated that the pace of increases should be gradual, leaving policy accommodative for "another few years."

With such an approach, the U.S. will run a "high-pressure economy" for a time, he said. While that’s good because it will suck workers into the labor market who are currently on the sidelines, "we don’t want to do that too long" for fear of imbalances arising.

"It’s unlikely that we’ll have to raise rates very rapidly, but at the same time, we don’t want to have to get behind the curve,” he said. "We want to get this just right."