PHILADELPHIA (Reuters) - A freshman Federal Reserve policymaker added his voice to the majority expecting an interest rate hike this month, saying on Friday he would prefer to start tightening sooner than later to keep the economy on track and to protect the central bank's credibility.
In his first public comments on policy since taking the job in July, Philadelphia Fed President Patrick Harker said he expects "steady and modest" growth as the economy is "approaching normalcy."
Raising rates in December would allow the Fed to tighten policy gradually while inflation, now too low, rises to a 2-percent target smoothly, he said.
"I would like to see rates raised sooner rather than later," he told a conference of economists and journalists at the Philadelphia Fed. "My fear is that the Federal Reserve risks losing its credibility and only adds uncertainty to the economic landscape the longer (it) waits to begin normalizing policy."
The Fed is roundly expected to raise rates modestly at a Dec. 15-16 policy meeting. It would be the first U.S. monetary tightening in nearly a decade.
"Raising rates this year will ... serve to reduce monetary policy uncertainty and to keep the economy on track for sustained growth with price stability," added Harker, who does not gain a vote on the central bank's policy-setting committee until 2017 under a Fed rotation.
Harker previously headed the University of Delaware and was a director at the Philadelphia Fed. His appointment as president attracted some controversy since he sat for a time on the board search committee that sought a successor to Charles Plosser.
(Reporting by Jonathan Spicer; Editing by Chizu Nomiyama)