A top Federal Reserve official downplayed recent signs that the economy is strengthening, but also said he is prepared to keep raising interest rates in smaller increments as often as needed to quell inflation.

Richmond Federal Reserve President Thomas Barkin said Friday that recent data showing an unusually robust job gain and a spike in retail sales last month reflected in part the impact of warm weather and the government’s seasonal adjustment process, rather than an acceleration of growth that could push inflation higher.

“I’m not taking as much signal from the data that we’ve gotten recently,” Barkin said in a roundtable with reporters. Though he added that could change “if you start to see it for multiple months.” Barkin is a member of the Fed’s 19-person interest rate setting committee.

The strong jobs and retail sales reports, along with hotter-than-expected inflation figures, have prompted several Wall Street economists to pencil in more interest rate hikes by the Fed this year. Those increases will likely raise borrowing costs for mortgages, auto loans, credit cards and for business loans.

Economists from Bank of America and Goldman Sachs both now expect the Fed will lift rates to a range of 5.25% to 5.5%, a quarter-point higher than the Fed itself projected at its December meeting. Its rate is currently 4.5% to 4.75%, the highest in 15 years.

Barkin’s comments follow tougher talk from other Fed officials earlier this week, such as Cleveland Fed president Loretta Mester, which has pushed stock and bond prices lower as investors increasingly expect more rate hikes.

In his remarks, Barkin also cautioned that measures of underlying inflation remain high and may require additional rate increases. He said he was comfortable with raising rates a quarter-point at a time, rather than moving back to the larger increases of a half-point or more that the Fed implemented last year.

“I like the (quarter-point) path because I believe it gives us the flexibility to respond to the economy as it comes in,” he said. “And that means that I’m comfortable raising rates potentially more often to a higher level.”

On Thursday, Mester said that she had seen a “compelling” case to raise the Fed’s benchmark rate by a half-point at its Feb. 1 meeting, the same increase it implemented in December. Instead, the Fed put in place a quarter-point hike.

Inflation accelerated from December to January, and core prices excluding food and energy also rose more quickly than economists expected. Overall, prices were 6.4% higher last month compared with a year ago, barely below December’s 6.5% reading.

“It is welcome news to see some moderation in inflation readings since last summer, but the level of inflation matters and it is still too high,” Mester said. Last month’s report showed “no improvement in underlying inflation.”

St. Louis Fed President James Bullard also said Thursday he would have preferred a half-point hike Feb. 1, according to news reports. He said he wanted to move the Fed’s rate to a range of 5.25% to 5.5% as fast as possible.

Barkin, however, said he did not support quickly pushing rates to a specific point and then pausing. He said there is too much uncertainty about the economy’s future path and what impact the Fed’s rate increases will have and when to take that approach. Instead, he prefers quarter-point hikes as needed to bring down inflation.

(AP)