Fed's Pianalto say economic uncertainty "very high"

ST LOUIS (Reuters) - Federal Reserve policy-makers on Thursday said the economic outlook remained uncertain and adopting a simple policy rule could help them to communicate.

"The uncertainty around the outlook today is very high," Cleveland Federal Reserve President Sandra Pianalto told the Ohio Grantmakers Forum annual conference.

"It's not clear how the financial market disruptions that we've seen are going to affect economic growth ... so ... we are waiting and learning," she added.

The Fed cut interest rates by an unexpectedly bold half percentage point to 4.75 percent on September 18 to shield the U.S. economy from the slumping housing market and a global credit crunch.

The next Fed policy meeting is on Oct 30-31, and investors are pretty evenly split on whether the U.S. central bank will lower rates by a quarter percentage point, or hold their fire while waiting for more information on growth.

Communicating the thinking behind policy decisions is a burning issue at the Fed at the moment, which is weighing whether an explicit inflation target would make its job of ensuring stable prices and sustainable growth easier.

Federal Reserve Bank of Philadelphia President Charles Plosser said that task could be simplified by adopting a policy rule of thumb.

"Simple rules may be useful, and could be useful in communication, in communicating key aspects about policy," Plosser told a conference sponsored by the St Louis Fed on monetary policy-making under uncertainty.

"Behavior governed by simple rules is easier to monitor, it is easier to communicate and I think this contributes to an open and transparent way of conducting monetary policy," Plosser told the conference, being held to honor St Louis Fed President William Poole, who retires next March.