With the US economy at full employment and inflation set to hit the Federal Reserve’s 2% target next year, the US central bank needs to keep raising rates gradually to keep the economy on an even keel, Reuters reports San Francisco Federal Reserve President John Williams said today. “If we delay too long, the economy will eventually overheat, causing inflation or some other problem,” Williams said in remarks prepared for delivery to the University of Technology Sydney. “Gradually raising interest rates to bring monetary policy back to normal helps us keep the economy growing at a rate that can be sustained for a longer time.”