The Federal Reserve should hike rates sooner rather than later to avoid a chance that inflation will accelerate, said Charles Plosser, president of the Philadelphia Fed, on Thursday. "Waiting too long to begin raising rates - especially waiting until we have fully met our goals for maximum employment - is risky because we cannot know when we have arrived," Plosser said in a speech in Allentown, Pa. He said that waiting too long could also return Fed policy to an aggressive "go-stop" policy where the Fed would have to slam on the brakes. Plosser said he was not suggesting that rates should necessarily be increased now. The first task is to change the Fed's language to allow for liftoff "sooner than many now anticipate," he said. Plosser is a voting member of the Fed's policy committee this year. He has dissented from the last two Fed policy statements in favor of scrapping the pledge to keep rates low for a "considerable time."
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