(Reuters) - With the U.S. economy making good progress toward full employment and inflation heading toward the Federal Reserve's 2 percent goal, it is time for an interest-rate increase, Dallas Fed Bank President Robert Kaplan suggested on Wednesday.

"I would advocate that we take action to remove some amounts of accommodation," Kaplan said in remarks prepared for delivery in New York. Kaplan, who will vote on the Fed's policy panel for the first time next year, said rate rises should be made "gradually and patiently."

The Fed next meets in December, and traders see about a nine in 10 chance that policymakers will raise rates then.

Since the Nov. 8 surprise election of Republican Donald Trump as U.S. president, stocks and Treasury yields have soared as investors anticipate economic stimulus in the way of infrastructure spending, tax cuts and fewer regulations on businesses.


While avoiding any mention of the president-elect, Kaplan appeared to endorse many of his policies, suggesting they offer a way out of the pattern of slow growth that has marked the last eight years.

"Public investments that upgrade aging infrastructure could potentially improve productivity and help bolster sluggish demand," Kaplan said, adding that a meaningful amount of such investment could come from public-private partnerships, an approach that Trump has said he favors.

"More broadly, tax reform and regulatory policies could be considered in order to create increased incentives for growth and investment, which might ultimately improve future rates of GDP growth," Kaplan said.

Improvements to education and reform of entitlements like Medicare and Social Security are also routes to stronger economic growth, he said.

Kaplan even offered some support for what may be one of Trump's most controversial policies, at least among economists: his call to rewrite some trade deals to give U.S. workers a fairer shake. Comprehensive trade reform, Kaplan said, "could create a more level global playing field for the movement of goods and services."

Kaplan also used his remarks to put in a plug for one economic policy that Trump has not supported: an immigration policy to help boost the workforce, which otherwise is under pressure because of the aging U.S. population.

(Reporting by Ann Saphir; Editing by Leslie Adler)

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