The outlook for the US economy is upbeat as factors that have been holding down growth, including businesses' reluctance to invest, begin to fade, a US central banker said Monday.

But Federal Reserve Vice Chair Randal Quarles said it is too soon to say the economy is at a turning point, and even with the possibility growth could accelerate, he seemed less concerned about the threat of inflation.

“I am fairly optimistic about the current state of the economy,” Quarles said in a speech to business economists, adding that “it has been quite some time since the economic environment has looked as favorable as it does now.”

Whether the US economy can sustain the faster pace will depend on whether the “factors that have been holding back growth for the past decade diminish, including weak investment and productivity.”

But there are encouraging signs that businesses are finally starting to boost investment, which could be helped by the recent corporate tax cuts, he said.

Even so, this shift to a higher growth rate remains “more as a clear possibility than an unarguable reality,” Quarles said.

The Fed was expected to raise the benchmark lending rate three times this year, but many economists now think four increases are more likely.

Quarles simply said he expects “further gradual increases in the policy rate will be appropriate.”

The central bank's vice chairman for supervision delivered his remarks the night before newly-installed Fed Chairman Jerome Powell is due to testify before Congress in his first public appearance since taking over from Janet Yellen.

His debut will be closely scrutinized for hints of whether the Fed is inclined to raise the benchmark interest rate at a faster pace.