The time is not yet right to taper the asset purchase program, according to Federal Reserve Bank of San Francisco President and CEO John C. Williams.

"Of course, the economy's increased momentum has raised questions about when the Fed will cut back, and eventually end, its asset purchase program. So, is it time to act? My answer is that it's still too early," he told the Sonoma County Economic Development Board, according to prepared text of his remarks, released by the Fed. "For one thing, we need to be sure that the economy can maintain its momentum in the face of ongoing fiscal contraction. And it is also prudent to wait a bit and make sure that inflation doesn't keep coming in below expectations, possibly signaling a more persistent decline in inflation."

Adjustments to the asset purchase program, he said, will be based on economic data. He echoed other Fed officials who this week reminded that by slowing or even stopping the asset buys, the Fed will still not be tightening monetary policy.

"The amount of stimulus our purchase program creates depends on the size of our securities holdings, not the amount we buy each month," Williams said. "Even if we start reducing our purchases later this year, our balance sheet will continue to grow, providing an increasing amount of stimulus. That is, as long as we are adding to our holdings of assets, we are adding monetary stimulus to the economy."

Also, the federal funds rate will remain low until the jobless rate drops below 6.5%, he said. Williams pointed to the Federal Open Market Committee' summary of economic projections, released last week, which indicates "a large majority of Committee participants don't expect the first increase in the federal funds rate to occur until 2015 or later. And the median projected value of the federal funds rate at the end of 2015 is only 1%."

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