Senior Fed official backs July interest rate hike, illustration photo/ Source: freepik.com

After 10 consecutive increases, the Fed in June chose not to hike its benchmark lending rate, saying policymakers would use the time to assess the impact of raised rates on the US economy.

According to meeting notes released later, most members of the Fed's rate-setting Federal Open Market Committee (FOMC) indicated they expect two additional hikes will be needed this year to help keep inflation on a downward trajectory.

On Thursday evening, Fed governor and FOMC member Christopher Waller indicated he was one of them.

"I see two more 25-basis-point hikes in the target range over the four remaining meetings this year as necessary to keep inflation moving toward our target," he told an audience in New York, according to prepared remarks.

Waller said he had backed last month's pause due to "lingering doubts about when or if an abrupt tightening of credit conditions would occur," following banking stresses in March.

"I felt that waiting another six weeks was prudent risk management," he added.

Waller said data published since June has made him more confident that the banking crisis will not lead to "significant" problems for the American economy.

"I see no reason why the first of those two hikes should not occur at our meeting later this month," he added.

Waller's remarks come a day after the Fed published a report indicating that "overall economic activity increased slightly since late May."

Futures traders assign a probability of more than 90 percent that the Fed will raise its benchmark lending rate by another quarter percentage-point on July 25-26.

This would bring its key lending rate to its highest level in more than two decades.