The Federal Reserve Governor Jerome Powell said in a speech in New York on Wednesday that the Fed should wait longer before tightening its monetary policy, but he expects the first interest rate hike "later this year". He added that he believes it's better to raise interest rate if the economic data better than expected.

Powell noted that the financial crisis damaged the productive capacity of the U.S. economy. "Given this uncertainty, it is even more difficult than usual to assess how much slack remains. It seems plausible that at least part of this supply-side damage could be reversed if the economy enjoys a period of sustained growth," he said.

The Federal Reserve governor expects that the labour market will continue to strengthen.

Powell noted that he expects the interest rate to increase "fairly gradually".