Fed's Plosser: Rate hike might be needed this year

WASHINGTON (MarketWatch)
The Federal Reserve may have to hike short-term interest rates before the end of this year, said Charles Plosser, the president of the Philadelphia Federal Reserve Bank, on Monday
 "If the economy evolves as I think it might," then a rate hike may be needed in 2012, Plosser said in an interview on CNBC
His timing is at odds with the Federal Open Market Committee, which said in a statement that it expects to keep rates at current levels that are close to zero until late 2014
Plosser said many market participants don't understand that the 2014 date from the FOMC was not a firm commitment
"It is conditional on the state of the economy," Plosser said
He forecast "continuous modest progress toward recovery," with economic growth averaging 3% in 2012 and 2013
The unemployment rate could end the year below 8%, he said
Last week, the Fed published, for the first time, the range of views of FOMC members about when interest rates should start rising
According to the data, six Fed officials believe rate hikes should come in either 2012 or 2013, while 11 said the first hike should not come until 2014 or later