"My best guess is that economic growth, supported by the Federal Reserve's stimulative monetary policy, will be sufficient to slowly reduce the unemployment rate over the coming year," he said.

However, Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, said in separate remarks Wednesday that the Fed needs to start boosting rates "soon."

"I would view a move to 1 percent as simply a continuation of our strategy to remove measures that were originally implemented in response to the intensification of the financial crisis that erupted in the fall of 2008," said Hoenig in a speech delivered in Sante Fe, New Mexico.

"A federal funds rate of 1 percent would still represent highly accommodative policy," he said. "From this point, further adjustment of the federal funds rate would depend on how economic and financial conditions develop."

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