Fed officials vague on when to trim U.S. stimulus

Three Federal Reserve officials weighed in on Friday on the question of when to reduce the U.S. central bank's bond buying, but their divergent views offered little clarity for investors trying to predict what will happen at a Fed meeting next month.

The comments by Atlanta Federal Reserve Bank President Dennis Lockhart, his St. Louis counterpart, James Bullard, and John Williams of the San Francisco Fed on CNBC television suggested U.S. monetary policymakers want to keep their options open headed into the much-anticipated meeting on September 17-18.

U.S. bond prices and, in recent days, currencies in some emerging markets, have fallen sharply as investors raised bets that the Fed will trim its $85-billion monthly asset-purchase program, which is meant to boost U.S. hiring and growth.

"I would be supportive in September as long as the data that comes in between now and then basically confirm the path we're on," Lockhart said.

"The key question is, do we have even at this moderate pace of growth a sustainable picture, something that's going to continue?" he asked. "Or is there risk that the economy gets knocked off its feet in some way?"

Lockhart, a centrist who does not have a vote on policy this year, added during a separate interview on Fox Business Network that he "wouldn't rule out September, but it could be later."

Bullard, who does have a vote and who has been sounding the alarm on low inflation readings, reiterated his view that the Fed need not rush to reduce the pace of quantitative easing, or QE3, in September.

"I don't think we have to be in any hurry in this situation," he said. "Inflation is running low, you've got mixed data on the economy, so I'd be cautious and I wouldn't want to pre-judge the meeting."

"I think we want to take our time, assess what's going on, before we make a move here," he said.