A DEBATE is intensifying among the U.S. Federal Reserve’s regional bank presidents about whether to push interest rates up from zero sooner than planned because of recent improvements in the U.S. job market, The Wall Street Journal reported.

    Most Fed officials at June’s policy meeting didn’t see rate increases until 2015, according to projections made before the Labor Department reported July 3 that the jobless rate fell to 6.1 percent in June, the Journal said in an article posted late Friday.

    Fed officials hadn’t expected unemployment to fall to near 6.1 percent until the end of this year.

    “We have made more progress toward our unemployment goals than we would have thought” earlier this year, San Francisco Federal Reserve President John Williams told the newspaper.

    He added that this development “suggests that monetary policy can safely start the process of normalization a touch earlier” than previously expected.

    He didn’t specify when that would be, but has said in the past he sees the first Fed rate increase in the second half of 2015, the paper reported.

    His comments are notable, the Journal said, because Williams tends to be in the camp of Fed officials, often called doves, who want to keep interest rates low, in contrast to the hawks who consistently call for higher rates to tamp down inflationary pressures.

    Williams said the shift in his view was not a “game changer” because he still believes there is “quite a bit” of slack in the economy holding inflation down.

    Meanwhile, Fed hawks are becoming more vocal about wanting earlier interest-rate increases.

    St. Louis Fed President James Bullard has been warning that market participants might not appreciate how quickly the economy is converging toward the Fed’s goals of maximum employment and stable prices, the paper said. (SD-Agencies)