Investors may have overreacted recently to the possibility of the U.S. Federal Reserve winding down its asset-buying stimulus, a top U.S. central bank official said on Thursday.
U.S. bond and stock markets abruptly sold off on May 22 when Fed Chairman Ben Bernanke told a congressional committee that the central bank's $85 billion in monthly purchases could be reduced "in the next few meetings" of the Fed's policy committee if the economy continues to gain traction.
Asked if markets overreacted in general recently, Philadelphia Fed President Charles Plosser told reporters: "Maybe yes."
"Since I don't know what the outcome is going to be, the markets seem to take this very seriously at some level which I think is probably a mistake," added Plosser, a long-time critic of the quantitative easing program known as QE3.
(Read More: Greenspan: Taper Now, Even If Economy Isn't Ready)