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Fed policy 'inappropriate' with prices rising, jobless falling: Plosser

Charles Plosser, president of the Federal Reserve Bank of Philadelphia.
Sam Hodgson | Bloomberg | Getty Images
Charles Plosser, president of the Federal Reserve Bank of Philadelphia.

Federal Reserve policy is inconsistent with "clear progress" made by the U.S. economy this year, Philadelphia Fed President Charles Plosser said on Friday, chiding the central bank for pushing easy money indefinitely.

In a statement explaining his rationale for dissenting from Wednesday's Federal Open Market Committee decision, Plosser—one of the Fed's most vocal proponents of tighter monetary policy—said he objected to the central bank's pledge to keep rates at current levels "for a considerable time" after it wraps up its massive bond buying.

"I viewed such language as an inappropriate characterization of the future path of policy and so may limit the Committee's flexibility going forward," the Philly Fed chief said, who was the lone dissenter on the FOMC earlier this week. His statement came ahead of the government's Friday morning release of the July employment report.


By contrast, another outspoken hawk—Dallas Fed President Richard Fisher—told CNBC on Friday that he didn't feel the need to dissent at Wednesday's FOMC meeting.

In a "Squawk Box" interview, Fisher explained: "I'm very pleased to see where we seem to be moving." He said he believes interest rates could start rising early in 2015, if the economic data keep coming in stronger.

Read MoreRates could rise 'early next year': Fed's Fisher

Plosser, meanwhile, said the world's largest economy is already performing ahead of key inflation and unemployment projections made earlier in the year.

"With the economy having already reached my year-end 2014 forecast for inflation and unemployment, and appearing to be well on its way toward achieving my 2015 forecasts approximately a year ahead of schedule, the funds rate setting remains well behind what I consider to be appropriate given our goals," he added.

By CNBC.com staff

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