Fed's Plosser: hike rates sooner not later: report

CHICAGO (Reuters) - Philadelphia Federal Reserve President Charles Plosser favors a fast reversal of the Fed's low interest rates, given worries about rising inflation, according to the New York Times.

"If we don't reverse our accommodative stance sooner rather than later, we will face rising inflation, which may be costly to deal with," Plosser said in an interview published on Monday.

Leaving rates too low could create "a risk to the Fed's credibility to contain inflation," Plosser said from the Kansas City Fed's economic symposium in Jackson Hole, Wyoming.

Plosser is a voting member of the central bank's policy-setting Federal Open Market Committee in 2008.

He dissented twice in favor of tighter policy, in March and April, but voted with the majority in June and August to hold benchmark rates steady at 2 percent after an aggressive rate-cutting campaign that started in September 2007.

Financial markets currently see little chance that the FOMC will raise benchmark rates at its mid-September meeting, and only a one-in-three chance for a rate hike before the end of 2008.

(Reporting by Ros Krasny, Editing by Chizu Nomiyama)