The Federal Reserve's decision-making process over the last six or eight months has been "a bit puzzling," former Fed Gov. Kevin Warsh told CNBC on Thursday.
"It is not obvious what their strategy is. I know they say they're data dependent. I don't know exactly what that means," he told CNBC's "Squawk Box" in an interview. "They look to me asset price dependent, more than they look [economic] data dependent."
The Fed has been using turbulent financial market conditions as an excuse — before and after December's interest rate hike — not to make a move, giving the impression policymakers care more about not tanking asset prices than reacting to economic conditions, Warsh said.
But now U.S. central bankers have waited too long, he contended. "The Fed had a long window to tighten policy, to raise rates — 2013, 2014 and [most of] 2015 — and it strikes me they missed that wide-open window."
"The bad news is the real side of the economy in the U.S. deteriorated since September," Warsh said. "Quarterly earnings will now be down six quarters in a row. That's the first time that's happened outside a recession."
Warsh, who left the Fed in 2011, said he would not have raised rates in December, which was the first hike in more than nine years.