With the US economy on firmer footing the Federal Reserve Bank is unlikely to extend its bond-buying stimulus program beyond a planned $600 billion, several top Fed officials said on Friday.
Members of the more hawkish wing of the Fed went further, with Philadelphia Fed Bank President Charles Plosser saying the US central bank will have to reverse its easy money policy in the "not-too-distant future" to avoid sowing the seeds of inflation.
The Fed has kept short-term rates near zero since December 2008 and has bought more than $2 trillion in long-term securities to push borrowing costs down further and boost recovery from the 2007-2009 recession.
At its most recent policy-setting meeting, policymakers voted to continue the bond-buying program begun last November and slated to end in June.
"Following through on that to the tune of $600 billion, like we've said, I think is appropriate," Chicago Fed President Evans told reporters at the regional bank's headquarters. "I personally don't see as many needs for a further amount, as I probably thought last fall."
Evans comments, along with those of Atlanta Fed President Dennis Lockhart who said on Friday that "it's a high bar" for the Fed to do more, suggest the debate at the Fed has moved away from a consideration of further easing.
"Given the pressure, from the hawks on the Federal Open Market Committee, the public, Congress, and foreign officials, I would highly doubt Evans would say something like that if Chairman Ben Bernanke, New York Fed President William Dudley, and Fed Vice Chair Janet Yellen didn't agree with him," said Eric Stein, a fund manager at Eaton Vance in Boston.
Minneapolis Fed President Narayana Kocherlakota told reporters in Marseilles that the US economy would need to worsen "materially" for the bank to consider further bond-buying.