A top Federal Reserve official expects the central bank to continue reducing a key stimulus program even though he sees more modest growth this year than many analysts have projected.
The Fed now is purchasing $65 billion a month in bonds after the Federal Open Market Committee voted to cut the amount by $10 billion at its December and January meetings.
Analysts expect the cuts to continue under new Fed Chair Janet L. Yellen, who was sworn in Monday.
"So it made sense to initiate the process of bringing the program to a close," he continued. "I expect to see further reductions in the pace of purchases at upcoming meetings."
Although Lacker noted the labor market has improved significantly since the bond-buying began in September 2012 -- the unemployment rate has dropped to 6.7%, from 8.1% -- he's not as optimistic about economic growth as other Fed officials and private economists.
He said Tuesday that "the turning of the calendar is an occasion for hope regarding prospects for the year ahead."
But he observed that hopes for stronger economic growth continually have been dashed during the recovery from the Great Recession.
"The pickup in growth late last year is certainly a welcome development, and it may well be a harbinger of stronger growth ahead," he said.
"But experience with similar growth spurts in the recent past suggests that it is too soon to make that call."