FED OFFICIAL OPTIMISTIC ON US ECONOMIC OUTLOOK

W since taking over from Janet Yellen. His debut will be closely scrutinized for hints of whether the Fed is inclined to raise the benchmark interest rate at a faster pace.

Inflation risk?

In a nod to the concerns that have roiled global stock markets this month, amid fears rising wages will fuel price increases and prompt the Fed to be more aggressive, Quarles said the inflation threat will depend on the driving factors.

“It might seem reasonable to assume that faster growth would I think a lot remains to be seen,” he said, adding that “the degree likely to be determined by the underlying factors that are prompting the increase in growth.”

An expansion driven by rising demand is likely to have a greater effect on prices than increasing the growth potential through investments that improve productivity.

“Growth led by an increase in the economy’s productive capacity, either through increased labor force participation or higher productivity growth, is likely to impart less upward pressure on prices,” he said.

But he acknowledged that there now are “some upside risks” to the economic outlook, and cited higher global growth as a contributing factor.

As employment has increased - sitions, “is likely that tightness in labor markets will eventually show up in wages and prices.”

- sures over the past year has mysti and transitory factors,” which he to move back to the central bank’s two percent target “over the next year or so.”