Federal Reserve Bank of San Francisco President John Williams said in Singapore on Thursday that the Fed will likely start to hike its interest rate later this year as the U.S. economy improves. He added that the Fed might raise its interest rate gradually and move them to normal levels over the next few years.

Williams noted that the Fed could hike its interest rate at every monetary policy meeting.

The Federal Reserve Bank of San Francisco president expects the U.S. economy to expand at around to 2.0% this year. Williams also expects that the Fed will hike its interest rate in 2015, 2016 and 2017, and the interest rate will be between 3.5% and 4%.

"If you look at those forecasts back from March you'll see an adjustment over time from where we are now, gradually towards this 3.5 to 4 percent and normal level of Federal Funds rate," he said.