The Federal Reserve is not "behind the curve" when it comes to inflation and could take action before the end of the year to tighten monetary policy, Philadelphia Fed President Charles Plosser told CNBC.
While acknowledging that headline consumer price numbers—which include volatile food and energy costs—are pointing toward higher inflation, he believes the Fed still has time to act.
"I don't think we're behind the curve yet," Plosser said. "I think there's a lot of things in terms of expectations in terms of the economy that bear watching very carefully. I don't think we're behind the curve yet, and I want to make sure we don't get behind the curve."
Central bankers have found themselves in an increasingly contentious debate over inflation as the Fed's balance sheet expands to nearly $3 trillion and inflation pressures build.
Prices at the pump have hit $3.81 for a gallon of unleaded gas nationwide, and food prices also are moving higher as commodities show relentless parabolic gains.
Plosser spoke just before government data showed that so-called "core" inflation, which strips out the food and energy costs that have risen dramatically over the past six months, remains tame and within expectations.
However, he said it is the headline inflation number that matters more and to which the central bank should focus its attention.
As such, he said price trends and his forecast of continued modest economic growth are consistent with the need to end the Fed's easing programs and to look to rein in monetary growth.
"If that forecast turns out to be the right forecast, then it certainly is not inconceivable to me that we would have to take our foot off the accelerator before the end of the year," he said.