Charles Plosser, president of the Philadelphia Federal Reserve Bank and the lone dissenter at the Fed's July policy meeting, on Saturday continued his push for the U.S. central bank to change its language on interest rate policy to reflect an improving economy and pave the way for a faster-than expected-interest rate hike.
Plosser, who is known for his longstanding warnings about potential inflation, said the Fed's steady, accommodative language had fallen out of step with a strengthening economy.
"We must acknowledge and thus prepare the markets for the fact that interest rates may begin to increase sooner than previously anticipated," Plosser said in remarks prepared for delivery to a group of Pennsylvania community bankers gathered for their annual convention at this seaside resort.
"I am not suggesting that rates should necessarily be increased now," said Plosser, who currently is a voter on the Fed's main policy-setting committee. But "our first task is to change the language in a way that allows for liftoff sooner than many now anticipate and sooner than suggested by our current guidance."