WASHINGTON, Sept. 9 (Xinhua) -- A top Federal Reserve official said on Friday that he wanted to see more evidence of sustained inflation in the United States before backing another interest rate hike.
"I've been characterized as being in the show me camp, which is to say I would like to see some more tangible evidence of inflation," Daniel Tarullo, Fed board governor and a voting member of Fed' s policy-setting panel, said in an interview with CNBC.
Tarullo didn't rule out the possibility of a rate hike this year. But he emphasized that U.S. inflation should pick up "in a sustainable way" to be at the central bank's target of 2 percent rather than being below the target before Fed raising rates again.
"We're not running a hot economy," he said, adding that "there is room for a robust discussion" about the U.S. economy's trajectory, including the labor market and the inflation rate.
"The labor market has basically been flat for a while. We've had unemployment not going down for a year. Some of the indicators of underemployment have flattened out rather than continuing to improve," he said.
"Remember our mandate is maximum employment not some constructed view of full employment," he said, suggesting the Fed had the opportunity to allow the labor market to continue to improve without running a hot economy.
The central bank should focus on the overall economic picture, not just each economic report, to understand the momentum of the economy going forward when considering monetary policy, he said.
Tarullo disagreed with president of Boston Federal Reserve Bank Eric Rosengren, who said earlier Friday that there' s a "reasonable case" to raise rates to avoid overheating the economy.
The Fed raised its target range for the federal funds rate by 25 basis points to 0.25-0.5 percent in December last year, the first rate hike in nearly a decade.
However, a slowdown in global economy since the start of this year and other global financial risks have made Fed policymakers cautious to hold off on any further rate hikes.
The Fed will hold its next policy meeting on Sept. 16-17. About 74 percent of 62 economists surveyed by the Wall Street Journal this month believed that the Fed will wait until December to raise rates.