Federal Reserve Bank of San Francisco President John Williams said in San Francisco on Friday that the Fed could hike its interest rate this year as full employment will be reached by the end of this year.

"I still believe this will be the year for lift-off. I see a safer course in starting sooner and proceeding more gradually," he said.

"Now that wage growth is starting to take off across multiple measures, it further confirms that the labour market is nearly healed," Williams added.

Federal Reserve Bank of San Francisco president expects inflation in the U.S. to reach the Fed's 2% target by the end of the next year as oil price rises and the U.S. dollar declines.

Williams is a voting member of the Federal Open Market Committee this year.