U.S. central bank officials have "a lot of time still" before they need to decide how large an interest rate increase to approve at their Sept. 20-21 policy meeting, Richmond Federal Reserve President Thomas Barkin said on Friday.

With an unusually long eight-week gap between meetings, the Fed still has "another bite" at data including jobs, inflation and other reports that will shape whether it opts for a half-percentage-point increase in its benchmark overnight interest rate or a third consecutive 75-basis-point hike, Barkin told reporters on the sidelines of a Maryland Association of Counties conference in Ocean City, Md.

Given the strength of inflation this year, with consumer prices increasing 8.5% on an annual basis in July, Barkin said the "urge" among central bankers was towards faster, front-loaded rate increases.

Inflation, when calculated using a separate measure preferred by the Fed is about three times the central bank's 2% target, and policymakers have made taming the price increases their top priority.

But after one of the fastest monetary policy shifts in decades, Barkin said the drive to raise rates also needs to be balanced with the impact rate hikes are having on the economy, and with sensitivity to the fact that the full brunt of those effects may be delayed.

So far, he said, the recent release of strong retail sales, stronger-than-expected industrial production, and continued hiring shows the U.S. economy may have gained steam since the Fed's July 26-27 meeting - rather than showed clear evidence that demand was cooling, as its policymakers feel is needed to temper inflation.

"The underlying activity metrics ... look stronger than three weeks ago," Barkin said.

Though recent inflation readings showed some slowing in the pace of price increases, he attributed that to changes in prices for cars and apparel that were "very bouncy."

"It's all a balance between how much underlying strength is there still in the economy, and therefore pressure on prices, and how much of that pressure on prices is easing" because of other changes in supply or commodity markets, Barkin said.

"On the margin I tilt toward 'get there faster,'" in moving rates to the restrictive level that will be needed to cool demand and control prices, Barkin said. But "there's still some question in my mind about how you balance that urge with the uncertainty about the underlying health of the economy in a world where our moves operate with a lag."

The Fed has lifted its policy rate by 2.25 percentage points since March, including two 75-basis-point moves in June and July. Officials are expected to hike that rate by half a percentage point or three-quarters of a percentage point next month.

In the interim they will receive two more inflation reports, estimates of August payroll employment growth, and more housing and consumer spending data.