By Jonathan Spicer
PHILADELPHIA (Reuters) - The Federal Reserve should be even more specific about when it plans to tighten policies after it took a step in the right direction last month, a top U.S. central banker said on Tuesday.
Philadelphia Federal Reserve Bank President Charles Plosser said, however, that the central bank is "not even close to withdrawing support prematurely," when asked by reporters about longer-term plans. He said the timing of the first rate rise, which will probably come next year, will be "all about the data."
After a policy-setting meeting last month, the Fed dropped a reference to outdated unemployment and inflation levels as a guide for when it would raise rates. Instead, it said rates will stay low for a considerable time beyond the end of a stimulative asset-purchase program, which should wind down later this year.
Giving more detail, the Fed also said it would consider a rate rise as it approaches its goals of 2 percent inflation and lower unemployment. But it added that rates may yet stay lower than their longer-run average "for some time."
"It was an important step," said Plosser, who voted to back the policy statement. "And I'd like to see us ... refine that language, make it clearer as to what exactly we mean by that."
"That will be a tricky task, but I think we can make some progress on that ... (and) be more precise about it," he added.
As it stands, most Fed policymakers expect to raise rates from near zero some time next year, with private economists predicting the move will come in mid-2015.
While U.S. unemployment is high at 6.7 percent and inflation is too low at just over 1 percent, the Fed sees progress.
Plosser said some of the low inflation in the United States is "transitory," while expectations for inflation remain "well anchored." He added: "I don't believe ... that buying even more assets than we are will help our inflation problem."
(Reporting by Jonathan Spicer; Editing by Jan Paschal Editing by Jonathan Oatis)
