Fed's Williams advocates new round of bond-buying

Aug 10 (Reuters) - The Federal Reserve should launch a fresh round of bond-buying to bring the lofty U.S. unemployment rate down more quickly, the president of the San Francisco Fed, John Williams, told his hometown newspaper this week.

Williams, who is currently a voter on the Fed's policy-setting panel, backed last week's Fed decision to leave policy on hold. The decision came just days before a government report showed the U.S. jobless rate ticked up to 8.3 percent in July.

Continued signs of economic weakness, including the jobs numbers, slower consumer spending and the continuing threat from the European debt crisis, mean the Fed should now do more, he told the San Francisco Chronicle in an interview.

"When you weigh the costs and benefits ... it's at the point where it is definitely tilting toward taking further action," Williams said in the interview published on Friday. "The hurdle to taking this step is relatively high. In my view, we have reached that hurdle."

Williams is the second Fed official this week to come out strongly for aggressive new steps to stimulate the economy.

On Monday, the head of the Boston Fed, Eric Rosengren, told The New York Times and CNBC that the U.S. central bank should start buying Treasury and mortgage-backed securities and continue to do so until the economy was back to full strength.

Many economists and traders expect that the Fed, when it next meets in mid-September, will indeed undertake a third round of quantitative easing.

Not all Fed officials are on board.

Dallas Fed President Richard Fisher, a longtime opponent of further policy easing, told Reuters in an interview on Monday that it would be a mistake to ease policy so close to the presidential election because it could create the impression the central bank is politically motivated.

The Williams interview took place on Wednesday, the San Francisco Chronicle said.