U.S. Fed official says world well-prepared for possible rate hike

St. Louis Federal Reserve President James Bullard said on Monday that global markets seemed to be well-prepared for possible rate hike in the United States amid growing expectations for the Federal Reserve's rate increase as early as in June.

"My sense is that markets are well-prepared for possible rate increase globally and that this is not too surprising given out lift-off in December and the policy of the committee which has been trying to normalize rates slowly and gradually over time," Bullard, who is in Seoul to attend the Bank of Korea (BOK)'s annual conference, told reporters.

"My ideal is that if all goes well, that will come out very smoothly and won't get too much of reaction in global financial markets," he said.

His comments came amid rising expectations that the Fed may hike rates as early as in June in consideration of improved U.S. economic indicators. The latest U.S. rate hike came in December last year, the first tightening in nearly a decade.

Fed Chair Janet Yellen said on Friday that a rate hike in the United States in coming months would be appropriate, boosting the Fed's rate hike expectations.

U.S. first-quarter GDP growth was revised up to an annualized rate of 0.8 percent from an earlier estimate of 0.5 percent, indicating the U.S. growth not as weak as initially estimated.

Bullard said the first-quarter GDP number was "mildly encouraging" as it was not as weak as where the Fed had before, noting that a rebound would seem to be materializing in the second quarter.

(APD)