Dallas Federal Reserve President Robert Kaplan told CNBC on Tuesday he likely will favor an interest rate increase before the end of 2022.

Though he doesn’t see inflation becoming a problem anytime soon, the central bank official said he expects the economy to progress enough to allow for the Fed to start pulling back on the high levels of accommodation it has provided since the Covid-19 pandemic.

Kaplan admitted he was one of the 2022 “dots” revealed after last week’s Federal Open Market Committee meeting that pointed to an increase next year. The Fed each quarter releases a dot plot of individual members’ expectations of where rates will be heading over the next three years and beyond.

However, just three other officials on the 18-member FOMC agreed with Kaplan’s position, and the plot overall still indicated no hikes through at least 2023.

“There were some dots starting increases in 2022, and I’m one of those dots, yes,” Kaplan said on “Squawk Box.”

The FOMC’s economic forecasts do not list individual members’ names, and it’s unusual for committee members to disclose where their dot was located.

But Kaplan said he’s eager for the Fed to start normalizing policy, even if he doesn’t think that day has arrived yet. Kaplan does not get a vote on official committee policy and won’t until 2023, though he still has input into decisions and makes an individual forecast on economic conditions and the trajectory of interest rates.

Three of the 2022 dots indicated one increase while the fourth pointed to two hikes. Kaplan did not indicate if he was the one expecting two increases.

“The forecast has improved, my forecast has improved meaningfully,” said Kaplan, adding that he is expecting 6.5% growth in gross domestic product in 2021, in line with the median committee estimate.

“Having said that, we’re still in the middle of the pandemic, and I want to see more than a forecast. I want to see actual evidence that that forecast is going to unfold,” Kaplan added.

“As we do, and as we make substantial further progress in meeting our dual mandate goals, I for one am going to be an advocate of beginning the process of moving some of these extraordinary monetary measures and doing it sooner rather than later,” he said. “But I need to see outcomes, not just a strong forecast.”

No inflation worries

The Fed cut benchmark short-term borrowing rates to near zero last March and has been buying at least $120 billion of bonds each month.

Some areas of the markets have been worried that the Fed may be keeping those measures in place for too long, particularly considering the high level of fiscal stimulus. Congress recently passed a $1.9 trillion stimulus package and soon will start work on an infrastructure program that could run to $3 trillion.

Those worries are focused on rising inflation expectations as indicated through rising bond yields.

However, Kaplan said he’s not worried about inflation, though he expects it to rise this year but just temporarily.

He said supply and demand issues unique to the pandemic will cause some price increases, and year-over-year comparisons will look high but only because inflation slowed considerably during the early days of the crisis.

Inflation, Kaplan said, “is not just a one-time price surge. It’s year-after-year price increases. I think the jury is very much out as to whether we’re going to see that. It’s not my base case.”

Kaplan added that he would not be in favor of the Fed adjusting its asset purchases to try to bring down longer-duration government bond yields. The rise in yields is reflecting the economic rebound, he said, and he expects them to continue to increase to where the 10-year note is up around 2%.

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