A top Federal Reserve official said on Tuesday he is closely following the crisis in Ukraine for potential effects on U.S. economic growth and volatility in commodity prices, but said that so far he sees no undue risks.
"It's something I'm watching really carefully for potential implications for growth," Jeffrey Lacker, president of the Richmond Fed, told the Council of Economic Education. "We obviously worry first about the disruptions of the commodity markets ... and volatile commodity prices."
Russia's military intervention in Ukraine's Crimea peninsula has driven up oil markets. But crude oil prices eased on Tuesday after President Vladimir Putin told reporters that Russia would only use force as a "last resort."
Lacker, speaking to reporters following his speech in New York, said that while there is a potential risk to the U.S. economy, he is reassured by the stability in commodity markets.
"So far commodity markets seem to have absorbed the news reasonably well," he said. "That's where I see the potential for risks, but they seem quite manageable at this point."
The Fed, in the first few steps to unwind its ultra-accommodative policies, has been cutting back on bond buying in measured steps.
It has held interest rates near zero since the worst of the financial crisis in late 2008, but according to forecasts last published in December, policymakers expect to start tightening sometime next year.
Lacker, who is toward the hawkish side of the spectrum of policymakers, said he had predicted the first rate rise would come in early 2015.
He also repeated that he would not opposed a more rapid tapering of purchases of U.S. Treasuries and mortgage-backed securities. The monthly asset purchases have already been cut twice cut by $10 billion increments, bringing the bond buys down to a monthly pace of $65 billion.
(Reporting by Jonathan Spicer; Editing by Leslie Adler)