Charles Plosser, the president of the Philadelphia Federal Reserve Bank, became the first top central bank official to call for higher interest rates in this cycle. In a speech on Tuesday, Plosser said the Fed had to start raising interest rates sooner rather than later and had to begin withdrawing excess cash from the financial system. If the Fed does not act soon "the inflation rate is likely to rise to levels that most would consider unacceptable," he warned. Plosser will not be a voting member of the Fed interest-rate committee until 2011. Plosser was relatively upbeat about the economic outlook, calling for growth to average around a 3% annual rate over the next two years
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Fed's Plosser TRIES to sound hawkish: "maybe appropriate for Fed hikes to start BEFORE Unemp. falls to acceptable levels"