US Fed centrist Sandra Pianalto wanted to trim quantitative easing

A US Federal Reserve official known for her centrist views has said she wanted to reduce the US central bank's asset purchases last month, adding her voice to the Fed's so-called policy hawks who have spoken out against the decision to leave monetary policy unchanged.

The admission by Sandra Pianalto, who is retiring as president of the Cleveland Fed early next year, may come as a surprise given her long-standing support of chairman Ben Bernanke's concerted effort to boost the United States economy.

Her remarks were similar to those on Tuesday by Philadelphia Fed president Charles Plosser, a consistent critic of the quantitative easing (QE) programme, and underscore just how close the Fed's decision was on September 18 to keep buying US$85 billion in Treasury and mortgage bonds each month.

"For me the improvement in labour markets seemed substantial enough to support a scaling back of the asset purchase programme at last month's FOMC meeting," Pianalto, who like Plosser does not have a vote on the policy-setting Federal Open Market Committee this year, told the Economic Club of Pittsburgh.

She stressed, however, that "very supportive" policies remain essential to support the economy, which she said faces a fresh threat from a possible US government debt default.

"The time has come for an expeditious phase-out of the purchase programme," Plosser told a chamber of commerce meeting in Johnstown, Pennsylvania. "We missed an excellent opportunity to begin this tapering process in September."