Fed's Harker would have been very comfortable with September rate hike

The US central bank will likely have enough data to back-up the need for a rate hike at its December policy meeting, a top official said, adding that the possibility of a move in November should not be dismissed either.

Speaking from Dublin, the president of the Federal Reserve bank of Philadelphia, Patrick Harker, reportedly also said he would have been very comfortable with a 25 basis point interest rate increase at the 21 September meeting of the Federal Open Market Committee.

"I am convinced we will achieve that (2 percent rate) sooner rather than later so I am somewhat concerned about falling behind the curve," he told Bloomberg TV earlier in the same day.

Harker was not sure if an increase in rates in December would be enough to keep pace with inflation and the economy from overheating.

Nonetheless, he did not believe there was great dissent among US rate-setters among how to proceed, except with regards to the best exact timing at which to remove policy accomodation.

"But nobody thinks that we should do that quickly - it will be a shallow path."

As of 1517 BST the yield on the benchmark 10-year US Treasury note was down by four basis points to 1.73% and that on the two-year note by two basis points to 0.84%.