Dallas Federal Reserve Bank President Robert Kaplan on Wednesday said he would support raising interest rates in the "near future," though a vote by Britain on whether to leave the European Union will weigh on any Fed rate decision in June.
"If economic data keeps going the way it is, I've said I will advocate for an increase in the near future," Kaplan told reporters after a speech. "That may not be June or July; my approach is take one meeting at a time."
It is "very possible," he added, that the outcome of the so-called Brexit referendum will not be clear when the Fed meets in June, about a week before the vote.
Kaplan said his economic outlook has not changed for several months.
"We'll do work between now and the next meeting to update that forecast, but as I sit here today my forecast is still basically consistent with what I was thinking in March," he said.
The majority of Kaplan's colleagues indicated in March that two rates hikes this year would appropriate, given their economic forecasts.
Kaplan did not say specifically how many rate hikes he favors, adding in a brief phone call afterwards that he is "not a fan" of predicting how many rate hikes the Fed should make this year.
The U.S. labor market is heading toward full employment, with unemployment likely to fall below its current 5 percent level, Kaplan said on Wednesday.
Kaplan also suggested he sees room for fiscal policy to boost the U.S. economy, given the limitations of monetary policy, and called for "a little bit" looser regulation for small banks.
"We've been suffocating our small banks, which is hurting local business formation," Kaplan said in Houston. "We need to look at the limits of monetary policy. Monetary policy is not the be-all and end-all, but we've not had a lot of fiscal policy in the last seven, eight years."
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