The Federal Reserve's recent promise to keep rates low for another two years was ''inappropriate policy at an inappropriate time,'' while its statement on the economy was excessively negative, a top Fed policymaker said Wednesday.
Philadelphia Federal Reserve President Charles Plosser said he dissented from the Fed's statement because policy should be determined by what the economy is doing rather than by a fixed timeline.
``It was inappropriate policy at an inappropriate time,'' Plosser told Bloomberg Radio. ``Policy shouldn't be dependent on the calendar, it should be dependent on the economy,'' he later added.
The Fed in a statement last week pledged to keep interest rates low for at least two more years and said it would consider further steps to help growth.
Plosser was one of three dissenters from the Fed's decision, who wanted to avoid any specific time reference on the low-rates pledge.
At the same time, the central bank gave a gloomy picture of the economy, saying that growth was proving considerably weaker than expected, inflation should remain contained for the foreseeable future and U.S. unemployment, currently at 9.1 percent, would come down only gradually.
``I thought the statement that described the state of the economy was excessively negative.
onfidence is not strong ... a very downbeat description of the economy would not do much to engender confidence in the business community or the consumer community,'' said Plosser.
The noted policy hawk said that although U.S. economic data had been weak in the first half of the year, reports in the last part of July contained good signals, including a recent decrease in first-time weekly claims for jobless benefits.