[ATLANTA] Jeffrey Lacker, one of the Federal Reserve's most hawkish policy makers, warned that the US central bank may have to raise rates more than three times next year and said he doesn't know if policy makers are already behind the curve on inflation.

"If we were to see a burst of demand growth, that would suggest a steeper path of rates to maintain price stability," the president of the Federal Reserve Bank of Richmond told reporters Friday after taking part in a panel discussion in Charlotte, North Carolina.

"There is a range of paces of interest rate hikes that would qualify as gradual, including paces more rapid than one or two or three a year," he said. "We can get where we need to be with a pace of increases that qualifies as gradual." His next scheduled turn as a Federal Open Market Committee voter is in 2018.

Investors have sold bonds this week in anticipation the US central bank will accelerate policy tightening next year, pushing yields on the 10-year Treasury note to 2.60 per cent from 2.47 per cent on Monday.

The Fed raised interest rates by a quarter-point on Wednesday and repeated that it expects to tighten policy gradually, signaling that three increases may be warranted in 2017, according to the median quarterly projection submitted by the 17 officials of the policy-setting FOMC.

"My guess would be more than three," Mr Lacker said. "I have been advocating for some time that we return - that we raise rates." The Fed forecasts included some from officials who made assumptions about how much additional stimulus the US economy will receive from tax cuts and infrastructure investment spending that's been promised by President-elect Donald Trump.

Fed chair Janet Yellen said in her post-FOMC meeting press conference Wednesday that there was "considerable uncertainty" about how economic policies may change and affect the economy. She speaks again on Monday when she addresses students on the state of the job market at a mid-year commencement at the University of Baltimore.

Mr Lacker, one of the Fed's firmest anti-inflation hawks who has previously argued for a faster pace of tightening, said it was unclear what economic policy would look like under the Trump administration. He said a prudent forecaster would include at least some impact from fiscal stimulus in any estimate for US growth.

"We are going to have to be very carefully vigilant as things roll forward." St Louis Fed chief James Bullard separately said that he expected Trump policies to lift growth but it would take some time before the impact was evident.

"We think there is some upside risk because the new administration wants faster growth and it is possible some of the things they are talking about will drive productivity higher," he told Bloomberg in a telephone interview.

"But we don't think that would be likely to occur in 2017. It would probably be 2018 or 2019. That will give us time as monetary policy makers to assess what is being done and make a judgment as we go forward."

BLOOMBERG