17.01.201823:32:00UTC+00Fed Officials See Solid Economic Growth, Disagree on Rate Increases

Two Federal Reserve officials said the U.S. economy should expand at a good rate this 2018, bolstered by tax cuts, although they did not agree on how near the economy is to overheating and the need for rate increases this year.

Speaking at an American Council of Life Insurers executive roundtable, Dallas Federal Reserve Bank President projected that 2018 is going to be a 'good year'. Federal Reserve Bank President Charles Evans told the same group that the U.S. economy is doing “extremely well”.

But while Kaplan voiced his concern regarding the economy overheating, and is convinced that the Fed needs to take deliberate actions this year by hiking interest rates three times, Evans said he is backing lesser rate increases, deeming them as “probably appropriate” as to allow inflation to hit and perhaps temporarily rise beyond the Fed's two-percent target.

Evans cautioned that if inflation does not reach the Fed's inflation target by the end of the current economic cycle, the central bank will have a hard time preventing or countering the next recession. He added that even if the Fed waits until mid year to raise rates, it could still raise rates three times if necessary.