WASHINGTON — Federal Reserve Gov. Daniel Tarullo Wednesday said he'll continue to be a reliable supporter of QE until he sees higher peaks of job creation without the deep valleys that have often erased the gains in the past and, so far, that's not happened.

Tarullo, interviewed on CNBC, said he doesn't think the asset purchases have to continue until more normal job creation is actually achieved, but the improvement in the outlook has to be much more solid.

The Fed's large-scale asset purchases, he said, are geared toward creating "a substantial improvement in the outlook for the labor market," not necessarily to achieve a substantial improvement.

The Federal Open Market Committee "has identified its standard as a substantial improvement in the outlook for the labor market, that is, it's a forward leaning, forward looking kind of standard," he said.

Another way of thinking about the Fed's goal is that the asset purchases, he said, "are trying to create some more traction for the economy on the road to maximum employment consistent with price stability, not to actually reach that destination."

Whatever the goal, Tarullo said he doesn't yet have it in sight. "I think what we've seen is a general uptick in economic performance," with a "fair number of data points that have been above expectations."

In itself, he said, that's nothing new. "Remember, this has happened before. In the spring of 2011, in the spring of 2010, in the fall of 2011, we had some increases that lasted for a few months in job creation and then they were followed by valleys."

Tarullo said he would rather see higher peaks followed at least by plateaus that can support new gains, not gains that are erased. "So we had peaks and then valleys," he continued.

"I think at the very least," he said, "what I would like to see is some good healthy peaks that have job creation well above the rate of new entrants into the labor market followed, not by valleys that take back some of that progress, but at the very least by a nice plateau that can be the basis for some more peaks later."

Tarullo did not included himself among those on the FOMC increasingly worried about the costs of QE. "I, I think like everybody, look at costs and benefits and of course there could be costs but there's certainly benefits."

At this point, he said, "Certainly, my judgment is that the benefits outweigh the costs and that's why I'll continue to vote in favor of the program."

On bank regulation, for which Tarullo is the Board of Governors' point man, he repeated regulators are still developing a consensus supporting the Volcker Rule, which may begin to take shape later this year. The dividing line between proprietary trading and hedging activities, he said, is "not black and white."

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.

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