Fed's Plosser warns against waiting too long to hike rates

Thu Aug 21, 2014 4:52pm 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) - The Federal Reserve should avoid waiting too long to raise interest rates, a top policymaker said on Thursday, arguing that there was no longer a lot of slack in the labor market.

"I would prefer us to begin raising rates sooner and raising them more gradually," Philadelphia Fed President Charles Plosser told network CNBC in an interview from a central bank symposium in Jackson Hole, Wyoming.

He said waiting too long to hike rates increased the risk the Fed will have to raise them "very quickly in response to a stronger economy and perhaps more inflation."

Asked if he believed it were true that there was significant underutilization of labor market resources, as the Fed asserted last month in a policy statement, Plosser said: "I don't think it is."

(Reporting by Jason Lange in Washington; Editing by Chris Reese)

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