Rosengren sees Fed exceeding inflation, unemployment targets by mid-2017

Rate-setters in the US had the luxury of waiting a little before moving on rates so as to get it "just right" but with the central bank set to exceed its goals, the risk existed of waiting too long, a top policymaker said.

Echoing remarks made on 14 October, Boston Fed president Eric Rosengren said in an interview with Reuters that: "We have the luxury right now to make a change, wait a little while, see what the impact is."

Nevertheless, and in line with the position he staked out at the Federal Reserve's last policy meeting on 21 September, Rosengren forecast the US unemployment rate will fall to 4.7% and inflation top the central bank's 2% target by the middle of 2017.

Those projections, the central banker argued, is why he voted for an immediate interest rate hike in September.

"If you wait too long ... the more likely you are going to have to do it more quickly ... The less likely you are to calibrate it just right."

During the Boston Fed's annual economic conference, chair Janet Yellen admitted the possibility that running a "high-pressure economy" might help undo damage from the 2007-2009 crisis that weighed on output and marginalised some workers.

For Rosengren, who did not dispute that, according to Reuters, his approach was about trying to determine just how tight labour markets could get without tying the monetary authority's hand behind its back.

"I want to probe, I don't want to plunge," he said. "I am getting more concerned about the optionality we are losing if we wait too long."