Kansas City Fed President Esther George said on Thursday that the Fed should continue to hike its interest rate gradually as the U.S. labour market continued to strengthen and inflation showed some signs of the acceleration.

"While I view the gradual approach as appropriate, postponing the removal of accommodation when the economy is near full employment and inflation is rising toward the 2 percent target could promote alternative risks that would decrease the likelihood of achieving our longer-run objectives," she said.

Esther voted for an interest rate hike at the Fed's monetary policy meeting in March.