Fed officials disagree on more easing

• "Jobs mismatches are not the primary problem," Rosengren said. Instead, he said, businesses are holding back hiring because they are not seeing enough demand for their products.

  He said the economy is growing too slowly to significantly reduce unemployment rate and stem disinflationary pressures.

  Rosengren, who has a vote on the central bank's policy-setting panel this year, is considered one of the more "dovish" Fed officials. Atlanta Fed President Dennis Lockhart, who is seen as a centrist but who won't rotate into a voting slot until 2012, said on Tuesday that he had yet to make up his mind on whether more easing was needed.

  ASSET BUYING QUESTIONED

  Plosser and Kocherlakota, who move into voting seats next year, are seen on the more inflation-focused, or "hawkish" side of the U.S. monetary policy debate.

  Kocherlakota said the main economic effect that a new round of quantitative easing would have is signaling to markets the Fed's commitment to keeping rates lower for longer. But its ability to bring long-term rates closer to near-zero short-term rates would be more "muted" than earlier efforts, he said.

  Still, he said he had lowered his outlook for growth next year to 2.5 percent from his 3 percent forecast last month and called the unemployment situation "deeply troubling."

  Plosser said he also expects to lower his growth forecast for 2011, but not for 2012. If the outlook for coming years is on track, monetary policy is unlikely to reduce the unemployment rate this year, he said,

  While he does not see a significant risk of sustained deflation, Plosser said he would back asset buying to raise inflation expectations if deflationary expectations were to materialize.

  "Asset purchases in our current economic environment can do little if anything to speed up the return to full employment," he said. "Because I see little gain at this point, and some costs, I would prefer not to engage in further asset purchases at this time."

  Rosengren said a challenge of unconventional policies is that the benefits are harder to track than the costs.

  While he said the Fed must try to weigh both benefits and costs, he added: "We cannot take lightly how far off the mark unemployment and inflation seem to be."

  (Additional reporting by Ann Saphir in Chicago, Emelia Sithole-Matarise and Naomi Tajitsu in London, and Mark Felsenthal in Vineland, N.J.; Editing by Andrew Hay and Kenneth Barry)