CLEVELAND -(Dow Jones)- A top Federal Reserve official said Thursday that she would like to support an increase in the policy rate before the central bank's late-2014 guidance, but that she's "not there yet" given her economic outlook.
"I am comfortable with the current stance of monetary policy," said Federal Reserve Bank of Cleveland President Sandra Pianalto at the City Club of Cleveland Business Leaders Series.
The official believes the Fed's current policy is hitting the sweet spot--just the right amount of support to guide the U.S. economy down the right path.
"In my assessment, doing more at this time could create too much inflation risk and doing less could risk weakening an already slow expansion and causing an unwelcome disinflation," she said in the prepared text of her speech.
She added that recent reading on the the U.S. labor market has been promising, but that her expectation is still for modest growth of 2.5% this year and 3% in 2013.
"Believe me, I would prefer nothing more than to support an increase in interest rates before late 2014 on the basis of a brighter outlook for economic growth--but I'm not there yet," the central banker said.
Pianalto, who recently rotated into a voting slot of the Fed's policy-setting board, reiterated much of what she said in her remarks about the economy Tuesday. This includes her expectations for inflation to stick close to 2% for the next few years. She also said then that it should take another four to five years to get unemployment down to around 6%.
In early January, Pianalto said that she considers the Fed's policy programs to have been "effective," adding that she was open to further monetary support and will continue to monitor its potential costs and benefits.
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