"We will be watching labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments," she said. "It is a complicated world out there, and no single data point will determine our next move."
Pianalto has long supported the Fed's aggressive policies to lift the economy from recession. Although she is leaving after more than 10 years as the Cleveland Fed's president, she is seen as a centrist whose views reflect those of the Fed's core decision-makers.
Responding to some economic strength in recent quarters and a broad drop in unemployment, the central bank last week adjusted its message to the public: while it continued to trim stimulative asset purchases, it said it would keep rates low for a "considerable time" after those purchases end.
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Pressed on this afterward, Yellen, in her first press conference since succeeding Ben Bernanke two months ago, said the time frame "probably means something on the order of around six months" depending on the economy.
Pianalto, in one of her last speeches as head of the Cleveland Fed, told the students the central bank is making some progress toward its goals of maximum sustainable employment and stable inflation around 2 percent, but that it is still "falling short."
Below-target inflation of just above 1 percent, she said, is a sign the economy is "not firing on all cylinders. The big risk," she continued, "is that persistently low inflation could tip into deflation."
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Pianalto, who has said she will work to improve education in her home state of Ohio after leaving the Fed, rarely gives economic predictions but on Thursday she forecast an uptick in inflation. She also expects about 3 percent gross domestic product growth in 2014 and 6.2 percent unemployment by year end.
Loretta Mester, who is now the top policy adviser at the Philadelphia Fed, was tapped in February to replace Pianalto starting June 1, when she will inherit Pianalto's rotating vote on policy for the rest of the year.
The bond-buying program, known as quantitative easing, or QE, is expecting to be wound down by year end. Launched in 2012, it is the third such effort by the Fed since the 2007-2009 recession. Pianalto said its benefits still outweigh its costs.
Longer-term, she said a decision to stop reinvesting the maturing Treasuries and mortgage-based debt will be the Fed's first step in unwinding its balance sheet, which has grown to exceed $4 trillion in the wake of the recession and financial crisis.