By Ann Saphir
PALM BEACH, Fla. (Reuters) - The U.S. economy should grow at a good clip this year, boosted by tax cuts, two Fed officials said on Wednesday, though they disagreed on how close the economy is to overheating and the need for rate hikes this year.
"2018 is going to be a good year," Dallas Federal Reserve Bank President Robert Kaplan said at an American Council of Life Insurers executive roundtable. The U.S. economy is doing "extremely well," Chicago Federal Reserve Bank President Charles Evans told the same group. Both said the economy would grow more than 2.5 percent this year, fast enough to give a further push downward to unemployment, already at a 17-year-low of 4.1 percent.
But while Kaplan said he is worried about the economy overheating, and is convinced the Fed needs to move "deliberately" this year by raising rates three times, Evans said he was more worried about low inflation.
Their divide reflects the debate that will continue to dominate the Fed as Governor Jerome Powell takes over from Janet Yellen as Fed chair early next month.
With inflation continuing to run below the Fed's 2-percent target, Evans has advocated a pause in rate hikes to allow inflation to gain more steam. Kaplan is with the majority of Fed officials who do not want to wait to raise rates for fear that if they do, inflation could surge.
Neither of them are voting members of the Fed's monetary policy committee this year, but both take part in the Fed's regular policy-setting meetings, the next of which is scheduled in two weeks.
(Reporting by Ann Saphir; Editing by Chizu Nomiyama)
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