Charles Plosser, president of the Federal Reserve Bank of Philadelphia, said the central bank needs to "promptly" tighten credit when necessary to avoid high inflation. "Our credibility depends on it," Plosser said. "We recognize the costs that significantly higher inflation and the ensuing loss of credibility will impose on the economy if we fail to act promptly, and perhaps aggressively, when the time comes to do so." Meanwhile, Richard Fisher, president of the Federal Reserve Bank of Dallas, said the central bank needs to start winding down accommodative monetary policy as soon as it is sure the economic recovery is on track.
Published in Brief: