The Federal Reserve's current policy on interest rates is too "risky" and could lead to "traumatic" consequences, one of the Fed's most outspoken hawks said on Thursday.
"We are running a very risky policy, if you will, given where the stance of the economy is and seems to be going," Charles Plosser, the president of the Federal Reserve Bank of Philadelphia, said in an interview.
In the most recent Fed minutes—released Wednesday—Plosser dissented from the majority's statement, which holds that a rate hike will not occur for a "considerable time" after bond purchases are concluded. According to the minutes, Plosser said that the opinion did not recognize the U.S. economy's improvements.
Plosser said that the Fed should not keep waiting to raise interest rates and instead should pursue a gradual increase. Under the current plan, the Fed could be forced to raise them "very quickly" in the future as a response to the strong economy.
"The consequences of [not raising rates soon] could be traumatic at some point in time if we're not careful, because then we'll have to turn around and race to catch up," he said.