Daily tumult from the European debt crisis is drowning out some otherwise good news in the U.S. economy, Charles Plosser, president of the Philadelphia Federal Reserve, told CNBC.
Unemployment is beginning to show sings of improvement and a another recession is unlikely, said Plosser, who recently has objected to some of the measures the central bank has taken to support the economy.
"Obviously there are some big tail risks out there, events that happen and overtake the economy," he said. "I don't see the underlying domestic economy heading toward recession."
However, he said, the daily gyrations coming from Europe, in particular the bevy of solutions that have been proposed and later rejected to stem the sovereign debt contagion, have made U.S. markets unpredictable.
Even there, though, Plosser said he sees some signs of stability, despite a volatile November on Wall Street.
"You watch the markets day to day and week to week since July sometime, it seems to be almost entirely driven by what was the news from Europe today," he said. "In fact, a lot of the good news about the U.S. economy, the domestic economy, got sort of washed away in the wild speculation about things that are going to happen in Europe."
As for the Fed's place in buffeting the U.S. economy against the debt storm, Plosser said events are indicating that the central bank's options could get muddied.
"We don't know what the economy is actually capable of in the near term in terms of growth rate, and whether monetary policy is the appropriate tool to do something about that," he said.