DALLAS May 19 The Federal Reserve is actively testing tools to raise rates when needed, and has a plan to exit its extraordinarily easy policies that will allow it to do so without sparking inflation, a top Fed official said on Monday.
"We are ready to implement it as appropriate; we won't allow inflation to take hold," San Francisco Fed President John Williams said at a monetary policy conference at the George W. Presidential Center.
Low inflation at this point is a bigger threat than high inflation, he added.
Dallas Fed President Richard Fisher, speaking on the same panel, was a bit less sanguine, calling the trillions of dollars of reserves at U.S. banks created by the Fed's super-easy monetary policies "inflationary tinder" the Fed needs to prevent from flaring into actual inflation.
(Reporting by Ann Saphir; Editing by Meredith Mazzilli)