WASHINGTON — The outspoken president of the Federal Reserve Bank of Philadelphia will step down in March, shortly before the central bank is expected to raise interest rates for the first time since the recession, the regional bank said Monday.
Charles Plosser, 66, has been one of the most vocal internal critics of the Fed’s efforts to revive the economy after the worst economic downturn since the Great Depression. Most recently, he has argued that the Fed should soon start hiking its target for short-term interest rates — which have been at zero since 2008 — to ensure the central bank has time to move gradually. Otherwise, he said, the Fed could find itself behind the curve and forced to raise rates quickly to keep up with an overheating economy.
“If that were the case, that in itself could be disruptive to the economy, and it could create more problems than it solves,” Plosser said in an interview last month. “That’s the problem with this stop-go policy. Do I know that’s going to happen? Of course not, but I think that’s a risk we’re taking, and I see less risk of starting earlier and ensuring that I can go slow.”
Plosser is a voting member of the Fed’s policy-setting committee and dissented during its meeting in Washington last week. He has opposed the central bank’s official position six times since taking over the helm of the Philadelphia Fed in 2006.
