Fed's George sees more rate hikes coming despite market swings

(Reuters) - The Federal Reserve should push ahead with interest rate hikes because of the strong fundamentals of the U.S. economy, a Fed policymaker said on Tuesday, downplaying the impact of financial market volatility.

"My view is that the committee should continue the gradual adjustment of moving rates higher," Kansas City Fed Bank President Esther George, who has a vote this year on the U.S. central bank's rate-setting committee, said in prepared remarks.

George said her view could change if there were a "substantial shift" in the outlook for the U.S. economy and that she was paying attention to financial market volatility as well as the possibility that job losses in the U.S. energy sector could act as a drag on the overall economy.

But the wild swings in financial markets are "not all that unexpected, nor necessarily worrisome" given that the Fed's rate hike in December pointed to an end of years of policies aimed at propping up financial market asset prices.

"The fundamentals of the U.S. economy currently appear strong enough to sustain positive growth going forward," George said in a speech to a business group in Kansas City, Missouri.

George added that she thought the Fed got a "late start" when it raised rates by a quarter percentage point in December after leaving them near zero for seven years. She did not say how many increases she thinks are warranted this year but said she backed a "gradual" path of hikes.

(Reporting by Jason Lange in Washington; Editing by Paul Simao)

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