Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said on Thursday he would not totally rule out lowering the amount of bonds the U.S. central bank is buying by this summer, but cautioned about economic pullbacks mid-way through each of the last two years.
"I think we need a few more months of really solid data and solid evidence that the recovery is moving ahead," Lockhart, a centrist at the Fed, said on CNBC television. "I really want to get beyond" any possible mid-year "swoon," he added.
The Fed is buying $85 billion in Treasuries and mortgage-backed securities each month to push down long-term interest rates and encourage investing and hiring, and has vowed to continue the program until there is substantial improvement in the labor market outlook.
On Wednesday, John Williams of the San Francisco Fed, another bellwether of the central bank's thinking, said the Fed could begin cutting back on purchases this summer if the economy continues to pick up steam.
Though the Fed's 19 policymakers decided last month to continue with the quantitative easing program, known as QE3, investors are anxiously predicting when the central bank will taper that level or stop it altogether because the easy money is boosting stock and bond markets.
Employers have added more than 200,000 jobs on average over the last four months, helping to lower the unemployment rate to 7.7 percent last month from 7.9 percent in October.
The March jobs report, due on Friday, is expected to show about 200,000 new jobs and no change to the unemployment rate.
Meanwhile, retail sales and manufacturing activity has been surprisingly robust so far this year, though there have been signs of weakness in recent weeks, reminding Americans about frustrating slumps in the spring and summer of 2012 and 2011.
Lockhart, who does not have a vote on monetary policy this year, said the Fed could adjust the level of purchases based on labor market conditions, or simply announce an end date.
He also repeated concerns about the Fed's growing stable of assets, now at more than $3 trillion, including risks of inflation and balance sheet losses down the road.
(Reporting by Jonathan Spicer in New York; Editing by Chizu Nomiyama and James Dalgleish)