Fed's Plosser: Not time yet to shift policy

EASTON, Penn., Sept 29 (Reuters) - It is not the time now to exit the Federal Reserve's extraordinary accommodative policy, the president of the Federal Reserve Bank of Philadelphia said on Tuesday.

"I don't think the time is now," Charles Plosser said in response to audience questions after giving a speech in Easton, Pennsylvania.

He said the Fed has the tools it needs to shift its policy when needed. "The real challenge is not can we unwind, but when," he said.

Plosser, who is not a voting member of the policy-setting Federal Open Market Committee this year, said he did not think inflation would be a problem in the "next few months."

"I think inflation is going to pick up more than some people think, in the latter half of 2010 probably," Plosser told reporters after his speech.

"In the second half of the year, that's when I'll be watching more carefully," Plosser said. "It's not the near-term I'm worried about, it's what happens in the second half of 2010 and beyond." (Reporting by Kristina Cooke; Editing by Leslie Adler)