The Federal Open Market Committee may need to raise rates before 2014, Federal Reserve Bank of Philadelphia president and chief executive officer Charles I. Plosser said Thursday.

Additional accommodation now “could lead us down a very treacherous path — one that would be ever more difficult for us to navigate and one that would increase the already-substantial risk of higher inflation,” Plosser told the Rotary Club of Wilmington, Del., according to prepared text of his remarks released by the Fed. “Prolonged efforts to hold interest rates near zero can lead to financial market distortions and the misallocation of resources that could lead to more, not less, economic instability.”

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.