Federal Reserve Bank of Philadelphia President Charles Plosser, who has opposed additional stimulus, said better-than-expected job growth bolsters the case for the central bank to wind down its asset purchases.
"With the economy doing what it's doing, it's probably time to figure out a way to gracefully exit from this," Plosser said Friday in an interview on CNBC television. "We should be looking for ways to withdraw support or at least slow down the increase in accommodation in order to begin to let the economy stabilize on its own."
Fed officials signaled they may taper their $85 billion in monthly bond buying "in coming months" if the economy improves as anticipated, according to the minutes of the Federal Open Market Committee's Oct. 29-30 meeting. Policy makers next meet Dec. 17-18 in Washington. Plosser, who isn't a voting member of the FOMC this year, will be able to vote on the panel in 2014.
Employers added more workers than forecast in November and the jobless rate dropped to a five-year low of 7%, showing further progress in the labor market that will help provide a spark for the U.S. economy.
"It's pretty positive, clearly," and "is in a good direction," Plosser said. "We're continuing to make slow progress."
The 203,000 increase in payrolls followed a revised 200,000 advance in October, Labor Department figures showed today in Washington. The median forecast of 89 economists surveyed by Bloomberg called for a 185,000 advance.
Plosser said he supports putting a fixed amount on the size of the Fed's asset-purchase program, differing from the current central bank policy of buying bonds without setting an end date or a limit on total purchases.
The "ability for us to fine-tune purchases is very difficult," Plosser said. "We need to go back to where we were" in previous rounds of QE, where the Fed announced a set amount of purchases and then stopped, he said, referring to quantitative easing.
Atlanta Fed President Dennis Lockhart and Dallas Fed President Richard Fisher said yesterday that any decision to taper bond buying should be accompanied by a limit on the size of the program or a timetable for ending it.
