Fed's Fisher, Plosser push for earlier rate hike
By Ann Saphir and Jason Lange
SAN FRANCISCO/WASHINGTON (Reuters) - Two top Federal Reserve officials known for their hawkish policy views said Friday they believed the U.S. economy was ready for interest rate hikes sooner than many expect, with one saying he thought rate hikes should start this year.
Fed policy, which has included keeping short-term borrowing costs near zero since December 2008, "remains well behind what I consider to be appropriate given our goals," Charles Plosser, president of the Philadelphia Fed, said in a statement.
Plosser was the lone dissenter in the U.S. central bank's decision Wednesday to keep its promise to hold interest rates near zero for a "considerable time" after it ends its bond-buying stimulus program in October.
The Fed should ditch that language, Plosser said, because it "may limit the committee’s flexibility going forward."
Dallas Fed President Richard Fisher, speaking on CNBC, said the Fed's "considerable time" language will be a subject of debate in future Fed meetings, though for him, his colleagues' acknowledgement of stronger inflation readings was enough to convince him not to dissent.
Still, he said it was "very possible" the Fed would raise rates early in 2015, Fisher said.
"I feel personally that we are closer to liftoff than we were, people felt we were, the market assumed we were, some time late in 2015," Fisher said. "I believe, personally, we have moved that forward, significantly."
The officials' remarks came ahead of a government report that showed employers added fewer jobs than expected in July, deflating some traders' expectations of a rate hike earlier in 2015. Continued...