Fed's Plosser stresses need for exit plan by Steve Goldstein

WASHINGTON (MarketWatch) -- The most important element of an exit strategy is not the formula or pace but that there's a clearly communicated plan, according to Philadelphia Fed President Charles Plosser in a speech prepared for delivery in Harrisburg, Pa. Plosser last week outlined a way to sell assets from the Fed's portfolio as it increased its policy rate, but the speech Friday suggested that he'd be open to other exit strategies, particularly if an explicit numerical target for inflation was adopted. As for timing, Plosser said that should happen when there are signs of rising inflation expectations or that growth rates are accelerating significantly. He didn't offer a prediction as to the March employment data but said the rate of unemployment will gradually fall to somewhere between 7% and 8% by the end of 2012. Plosser is a voting member of the Federal Open Market Committee and generally considered the most hawkish member.