CHICAGO (Reuters) - The turn in Federal Reserve interest rate policy will likely come before it is clearly necessary based on economic conditions, and could be aggressive, a top Fed policy-maker said on Friday.
Fed Governor Kevin Warsh said that data in the past couple of months show continued improvement in the economy, and that a virtuous circle could be developing between more stable financial markets and real activity.
Remarks prepared for Warsh's speech to a Chicago Fed/World Bank conference echoed those made by the policy-maker in a Wall Street Journal op-ed piece on Friday.
"If policymakers insist on waiting until the level of real activity has plainly and substantially returned to normal -- and the economy has returned to self-sustaining trend growth -- they will almost certainly have waited too long," Warsh said.
The velocity of the policy turn could also be faster than many expect, he said.
"Ultimately, when the decision is made to remove policy accommodation further, prudent risk management may prescribe that it be accomplished with greater swiftness than is modern central bank custom," he said.
"The speed and force of the action ahead may bear some corresponding symmetry to the path that preceded it."
(Reporting by Ros Krasny; Editing by James Dalgleish)