Says it makes sense to raise interest rates gradually, sooner than later

Says US economy is in good shape, headed in right direction

Sees unemployment rate dropping to 4.5 pct over coming year

Sees inflation rising to 2 pct in next year or two

Fed's low inflation target is not well suited to era of persistently low interest rates

Fed should consider raising inflation target, switching to nominal GDP-targeting

Says now is the time for Fed to actively study new policy options