12:40 AM » Fed's Plosser warns of dire outcomes from current policy stance
Fed's Plosser warns of dire outcomes from current policy stance JACKSON HOLE (MarketWatch) - The Federal Reserve's current policy stance is risky in light of economic conditions, said Charles Plosser, the president of the Philadelphia Fed, on Thursday. "I think we are running a risky policy given where the stance of the economy is and seems to be going," Plosser said in an interview with CNBC. The currency policy stance may lead to another financial crisis or a lot of inflation. "The consequences could be dire if we get this wrong," he said. Fed Chairwoman Janet Yellen and her allies on the central bank are signaling that economic conditions are likely to support a first rate hike in mid-2015. Plosser has been advocating a quicker rate hike, perhaps even this year. He dissented from the Fed's latest policy statement, saying the central bank should remove its pledge to keep rates close to zero for "a considerable time" after it completes bond purchases. Plosser said the longer the Fed waits, the more likely it is that the central bank will have to raise rates sharply. The Fed might have to "race to catch up" with inflation, he said.