NEW YORK (Reuters) - A top Federal Reserve official on Monday said he would have preferred a more optimistic statement on the U.S. economy, after the central bank last week painted a grim picture of the recovery and forecast ultra-low interest rates until late 2014.
“I thought it was a little bit pessimistic. I would have preferred a little more optimism in the outlook,” Philadelphia Fed President Charles Plosser said on CNBC.
“It’s not that we’re going to take off like a sky rocket going into this year, but I do think things are looking better,” he said, citing a drop in the unemployment rate to 8.5 percent, which is still historically high.
The Fed in late 2008 slashed interest rates to near zero and has since bought $2.3 trillion in long-term securities in an unprecedented drive to spur growth and revive the economy after the worst recession in decades.
Yet the recovery has been slow and, after the Fed’s two-day policy-setting meeting, Chairman Ben Bernanke said on Wednesday the Fed stood ready to offer more stimulus in the form of bond purchases if inflation remains below its newly-announced target of 2 percent, and if unemployment remains high.
Plosser, a policy hawk concerned more with keeping a lid on inflation than on the labor market, said he didn’t see a need to buy mortgage-backed securities at this point.
“I’m very concerned about policy (in which) we keep saying that we’ve got to do more... I worry about this accelerationist view that we have to go ever faster on the pedal of monetary policy,” said Plosser, who does not have a vote on the Fed’s policy-setting panel this year.
“I was unhappy with the calendar date in the statement. I’m still unhappy with the calendar date in the statement. I don’t think that’s the right way to convey policy,” he said, adding he expects rates to likely rise before mid-2013, even as early as this year.
Additional reporting by Leah Schnurr; Editing by Padraic Cassidy