Fed's Lacker: More easing should not be on table (by Greg Robb)

WASHINGTON (MarketWatch) - There is no need for another round of asset purchases, or quantitative easing, from the Federal Reserve given the economic outlook, said Jeffrey Lacker, the president of the Richmond Federal Reserve Bank, on Friday. "If we get growth about what I am expecting, about what a lot of people are expecting... if we can get growth around those lines, I don't see where the rationale for further easing is going to come from," Lacker said in an interview with CNBC cable television channel. "I think we are really far from that right now," he said. Lacker forecast growth of about 2.5% rate this year, with further improvement next year. Lacker, a voting member of the Fed's interest-rate-setting Federal Open Market Committee, has dissented from the two Fed policy statements this year which said that economic conditions are likely to warrant exceptionally low rates until late 2014. Lacker said there was a "good chance" that the unemployment rate could get below 8% by 2013 and said he thought interest rates would need to start rising by the middle of that year. The Fed can't wait for full employment to begin tightening, because inflation pressure can arise even if the unemployment rate is above 6% or 7%, he said. "I think we have overestimated the extent to which slack is going to depress inflation," he said.