U.S. Federal Reserve vice chairman Stanley Fischer said Wednesday that financial markets are underestimating how fast the central bank will increase interest rates this year.

"We watch what the market thinks but we can't be led by what the market thinks," Fischer said in an interview with CNBC. "Our analysis says that market is underestimating where we are going to be."

Fischer said Fed policymakers' forecasts of four more rate hikes in 2016 were "in the ballpark," though the markets currently expected the central bank to only raise interest rates twice this year.

"You can't rule out that there is some probability they are right because there's uncertainty. But we think that they are too low," he said.

Fischer's remarks came three weeks after the central bank raised the benchmark short-term interest rates for the first time in nearly a decade.

While the decision to raise federal funds rates by 25 basis points from near zero was unanimous, some Fed officials had expressed concerns about the low inflation and its impact on the U.S. economy, according to the minutes of the Fed's policy meeting on Dec. 15-16, which were released Wednesday.

"In the current situation, because of their significant concern about still-low readings on actual inflation and the uncertainty and risks present in the inflation outlook, they agreed to indicate that the Committee would carefully monitor actual and expected progress toward its inflation goal," the Fed said in the document.

Fischer said he continued to expect inflation to move back towards the central bank's 2 percent target as the prices of oil and the value of the U.S. dollar stabilize.

"As oil stabilizes -- and it will stabilize one day and it'll even go up one day -- we'll see this trend beginning to turn," Fischer said. "Those declines in oil and that appreciation of the dollar are not going to go on forever, or even very long."

Charles Collyns, managing director and chief economist at the Institute of International Finance (IIF), said the Fed would be "very cautious" to raise interest rates this year amid a weak global economy.

"I think the global economy will continue to be not that strong in 2016," Collyns told Xinhua in a recent interview, adding that the U.S. economy would face headwinds from the quite weak performance of emerging markets and further appreciation of the U.S. dollar.

The World Bank on Wednesday downgraded its forecast for global growth this year to 2.9 percent from its prior estimate of 3.3 percent last June, citing weak growth among major emerging market economies.

"I expect the Federal Reserve to be very cautious," said Collyns. "They will only increase (interest rates) two times (this year), one in June and one in December."