Fed should have cut 'patient' from January statement: Plosser

[February 06, 2015]  WASHINGTON (Reuters) - The Federal Reserve should have dropped the word "patient" from its policy statement last month, a top Fed official said on Friday, saying the focus on the timing for the central bank's interest rate hike should be based purely on the economy.

Philadelphia Fed President Charles Plosser, who is not a voting member of the Fed's policy committee and will step down this year, said the Fed needs to figure out a way to transition from the word "patient." Beginning in December, the Fed has said it will be patient with raising rates, with the market looking for the central bank to drop the word as a sign it is ready to move.

"It never should have been there in the first place," Plosser said, speaking on CNBC. "It's just another example of people thinking in terms of calendar dates or number of meetings."

Plosser has called for the Fed to lift rates sooner to avoid waiting too long and risking a surge in inflation.

Plosser added in the interview that low oil prices are good for the U.S. economy, and that low bond yields were a sign of weakness in Europe.

(Reporting by Michael Flaherty; Editing by Chizu Nomiyama)

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