Fed closer to tightening policy than many think: Plosser

Fri Jul 11, 2014 12:57pm EDT

Philadelphia Federal Reserve President Charles Plosser speaks at the Council on Foreign Relations in New York, May 8, 2014.  REUTERS/Brendan McDermid

Philadelphia Federal Reserve President Charles Plosser speaks at the Council on Foreign Relations in New York, May 8, 2014.

Credit: Reuters/Brendan McDermid

(Reuters) - A top U.S. central banker said on Friday the Federal Reserve may be "closer than a lot of people think" to raising interest rates given the firmer recent inflation and labor data.

Charles Plosser, president of the Philadelphia Fed, told Bloomberg TV the Fed is now closer than it has been to reaching its objectives, no matter how they are measured, adding: "We should not be keeping interest rates at zero until we reach all our objectives."

Many monetary policy rules and guidelines are now suggesting the Fed should start to tighten policy after years of accommodation in the post-crisis era, Plosser said.

"For us to deviate from what these guidelines and benchmark rules tell us, we'd have to have pretty good reason to want to deviate from them and explain why," he said. "So I think we're closer than a lot of people might think."

(Reporting by Jonathan Spicer in New York; Editing by James Dalgleish)

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