Federal Reserve Bank of Philadelphia President Charles Plosser, who votes on policy this year, said recent encouraging economic data isn’t enough to change the pace of the central bank’s asset purchases.
“It would have been nice, from my perspective, had we started at a faster pace,” Plosser said Monday in a Bloomberg Television interview with Manus Cranny in Paris, referring to the Fed’s reduction of its stimulus program in $10 billion increments at each policy meeting.
“Given the fact that we’ve embarked on measured reductions, it’s important to give some certainty or at least clarity to the markets on what we’re doing,” Plosser said. “It’s OK to continue at 10 billion. The hurdle rate for change is pretty high in either direction.”
The Fed is trying to determine whether the economy has shown recent signs of weakness because of severe winter weather or fundamental obstacles to growth. The policy-setting Federal Open Market Committee meets March 18-19 in its first gathering led by Chair Janet Yellen since she succeeded Ben S. Bernanke last month.
Chicago Fed President Charles Evans echoed Plosser’s comments in a speech in Columbus, Georgia, saying growth will probably accelerate to 2.5 percent to 3 percent this year after winter weather impeded the economy in the first quarter.
“We have got a pretty high hurdle for altering the tapering plan,” Evans said to reporters after his speech at Columbus State University. He doesn’t vote on policy this year.
While weather has slowed growth, “I am still in the camp that thinks this is transitory. We have got better momentum ahead of us,” he said.
