Federal Reserve chief: June rate hike won't take away the punch bowl

The US Federal Reserve is still on course to raise interest rates this summer, according to one of the central bank's main chiefs who believes a rate hike will not take away the "punch bowl" from the economic recovery.

In a speech on Friday, Jeffery Lacker, president of the Richmond Federal Reserve, said: "Raising the funds rate target a notch or two is less like taking away the punch bowl and more like just slowing down the refills.

"We will still be spiking the punch — just not quite as rapidly as we have been."

Disappointing job creation numbers, which fell to their lowest level since December 2013, tempered expectations of a lift-off in rates this summer.

The world's largest central bank has kept its main interest rate at rock bottom since December 2008.

However, Mr Lacker - one of the central bank's most hawkish members - added that "unless incoming economic reports diverge substantially from projections, the case for raising rates will remain strong at the June meeting".

Minutes released from the Fed's latest interest rate meeting showed that some members of its committee were in favour of holding off on a rate hike until later in the year.

"Further improvement in the labour market, a stabilisation of energy prices, and a leveling out of the foreign exchange value of the dollar were all seen as helpful in establishing confidence that inflation would turn up," said the FOMC.