The U.S. economy is likely to rebound in the second quarter after a weak first quarter, said Federal Reserve governor Daniel Tarullo on Wednesday.
“I think there is a fair chance that the Q2 numbers are going to look pretty good,” Tarullo said in an interview with CNBC.
Asked for specifics, the Fed governor pointed to “forward indicators” like job growth, orders for durable goods and business investment.
Tarullo also said the strong gain in March ADP data confirms that “traction in the economy really seemed to have taken hold” in the economic data. The data “probably augurs well for second-quarter growth,” he said.
Private-sector employment picked up in March as business added 263,000 jobs, according to ADP.
Read: Gain in March ADP much stronger than consensus
Based on his outlook, it is time for the Fed to start thinking about shrinking its balance sheet, he said.
Tarullo is leaving the Fed board Wednesday after eight years at the central bank during which he spearheaded the Fed’s efforts to strengthen bank regulation.
In a farewell speech on Tuesday, Tarullo said he thought the Volcker rule was too clunky and needed to be fixed but defended the capital requirements put in place by Dodd-Frank law.
See: Fed’s Tarullo says Volcker rule may be hurting trading