Binding of the Fed buying soon could backfire: Plosser (Reuters)

Philadelphia (Reuters) - plan aggressive link-purchase of reserve Federal American could soon backfire unless the Central Bank changes gradually courses at the head of inflation, a senior Fed known for his hawkish position catch said on Tuesday.

Philadelphia Federal Reserve President Bank Charles Plosser, said the $ 600 billion quantitative easing plan, known as de2, should be revisited if the current U.S. economy "moderate recovery" picks up steam.

The prospect of sustained deflation of prices — a concern for the Fed Chairman, Ben Bernanke and other funders plan de2 controversial - is very likely partly because massive reserves of the Fed will eventually flow in economy, added Plosser.

"If the economy begins to grow faster and the sustainability of this recovery continues to gain traction and then purchase program should be reconsidered as well as other aspects of our political position very accommodating," Clarida said in a speech to the risk management Association.

He said "the aggressiveness of our accommodation policy soon may backfire we if we don't begin to gradually reverse course;

"On the other hand, if the serious risks of deflation or deflationary expectations emerge, then we must take account that adjust us our position as policy."

The orthogonality large-scale speech was his first public comment this year, in which he turns into a slot vote on the policy of the Fed Panel.

It comes as recent data show U.S. economy is recovering slowly, but also as Fed officials increasingly buy de2, which in early November, Fed the value of purchase of Treasury securities Council that rejuvenate restoration.

While some have credited de2 to have already played a role in the rebound, Plosser said that argument likely "stretches things." Policy can affect the financial markets, but it was too early to have an impact on the "real economy", including jobs, retail sales and consumer spending he told journalists.

In particular, the regional Fed Chairman said he watched inflation expectations and any "downward trajectory" of unemployment for a clear signal reverse policy fed.

DATA NUANCED BEFORE THE FED MEETING

De2, the second series of such flexibility is unexplored more deeply political Fed in an effort to fend off the threat of deflation and less than unemployment, dropped to a top still 9.4% in December.

The Central Bank has kept interest rates close to zero for more than two years fighting the worst recession in decades.

Critics of the binding - buy, including many economists and Republican members of Congress who want what it contained, say that it lays the groundwork for inflation and the problem of bubbles.

"The inflation is currently low level of 1.5-2.0% of many monetary policymakers would prefer, it does not follow that the prolonged deflation is imminent or even probable," Clarida said, adding he expects "inflation will be mastered in the short term."

Inflation is expected to accelerate to 1.5-2.0% in the next two years, inflationary expectations. He also predicted a reading of 2.5 to 3% of GDP in 2010 and 3.0 to 3.5% of GDP annually in 2011 and 2012.

Plosser said he expects that "bounce surround short-term" unemployment number prior to recover gradually. Although the U.S. unemployment rate dropped last month, the economy month generated only a disappointing 103,000 jobs, and the data showed a troubling increase the number of those leaving the workforce.

Yet American consumer spending, manufacturing and trade reports have, in recent months suggested the largest world economy is healing, defining a step nuanced fed of the next meeting of January 25-26 the policy setting.

Plosser was last a vote on policy-making federal open market Committee (FOMC) in 2008. He and Dallas Fed President Richard Fisher, also a voting member this year, are viewed as more likely to vote against the majority – although Fisher said in an article on Monday that de2 would probably run its course.

"Unanimity is not the natural state of things in life - is not within the halls of the Federal Reserve," Clarida said Tuesday.

(Editing by Chizu Nomiyama)