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NEW YORK, Sept 20 (Reuters) - Low readings on inflation mean that the U.S. Federal Reserve can be patient on deciding when to scale back its pace of asset purchases, a senior Fed official said on Friday, cautioning that he would not back action until price pressures picked up.
"While I expect inflation to rise during the coming quarters, I want to see evidence of such an increase before endorsing less accommodative policy action by the FOMC," James Bullard, president of the St. Louis Federal Reserve, said.
The Federal Open Market Committee, the Fed's policy-setting body, on Wednesday voted to continue to buy bonds at a monthly pace of $85 billion.
Bullard, however, said the prospects for tapering would harden if U.S. payroll and unemployment data recovered further.
"To the extent that these two important labor market indicators continue to show improvement, the likelihood of tapering policy action will continue to rise," Bullard said in remarks prepared for delivery to the New York Association for Business Economics.
Bullard, a committee voter this year, supported the decision on Wednesday not to alter the current pace of bond purchases.
The move stunned financial markets, which had expected a modest adjustment that would have signaled the beginning of the end to a phase of ultra-easy U.S. monetary policy that has already lasted five years.