Richard Fisher, one of the Federal Reserve's most ardent policy hawks, said on Tuesday he would favor ending the U.S. central bank's massive bond-buying program in October, but said he does not expect the Fed to start raising interest rates until next year.
"The odds are slim" of a rate rise immediately after the bond-buying program is ended, Fisher, president of the Dallas Federal Reserve, told Reuters in a telephone interview.
"I don't expect we'll raise short-term rates this year," said Fisher, who is a voting member of the Fed's policy-setting committee this year.
After years of extraordinary interventions designed to push down borrowing costs and boost hiring and investment, the Fed has been winding down its current program of quantitative easing, known as QE3. Fisher opposed the program from its beginning.
The Fed launched QE3 in September 2012 and had been buying $85 billion a month in Treasuries and mortgage-backed securities. In December the Fed voted to scale back the monthly purchases by $10 billion, and it has continued to scale back the purchases by $10 billion at each of its subsequent three meetings.
When policymakers next meet in two weeks, they are expected to continue trimming the program, but at the same time to pledge to keep interest rates near zero to help nurse the recovery.
If the Fed continues on its current pace, its monthly purchase of bonds will be down to $15 billion by the time it meets in October.
"I will vote to end it in October," Fisher said.
Some of Fisher's fellow policy hawks, notably Kansas City Fed President Esther George, have pushed to raise interest rates shortly after bond-buying ends. Fisher has taken no such stance.
The timing of a rate hike "depends on developments in the economy," he said, including inflation and job growth. "I am not going to focus on raising rates until we have completed the wind-down."
(Reporting by Ann Saphir; Editing by Leslie Adler)