Fed's Plosser adopts moderate tone toward QE2 (by Greg Robb)

WASHINGTON (MarketWatch) - Charles Plosser, the president of the Philadelphia Federal Reserve Bank, adopted a moderate tone towards the Fed's $600 billion bond buying program. In his first speech of the year Tuesday, Plosser said the Fed may have to adjust the plan if the economy gathers steam, but he left open the door for more easing if more serious deflation risks emerge. Plosser is considered by many to replace Kansas City Fed President Thomas Hoenig as a frequent dissenter at FOMC meetings this year. Hoenig, who rotated off the FOMC at the end of 2010, dissented from all 8 policy statements in 2010. Plosser said debate inside the Fed was healthy. The Philadelphia Fed president made no secret that he thinks tighter policy many be needed soon. "The aggressiveness of our accommodative policy may soon backfire on us if we don't begin to gradually reverse course," he said.