By Ben Leubsdorf 

Federal Reserve Governor Daniel Tarullo told CNBC on Tuesday the Fed should wait for "tangible evidence" of a pickup in U.S. inflation, and that short-term interest rates should remain pinned near zero into 2016.

Below are excerpts of Mr. Tarullo's remarks on the economic outlook and monetary policy from his televised interview with CNBC.

On the U.S. economy:

"We don't have an enormous amount of momentum, even though we've made a fair amount of progress."

On the Fed's dual goals of maximum employment and stable prices:

"There's no question that we've made a lot of progress in the labor market. But I don't think anybody knows how much more progress could be made in a noninflationary fashion....On inflation, for most of the time since the crisis and the recession, we have been running below the [Federal Open Market Committee's] stated 2% target and we're currently in a globally disinflationary environment with the impact of a stronger dollar...and lower energy prices playing their part."

On the Phillips curve, a theory that reduced slack in the labor market generates higher wage and price growth:

"There is a good bit of uncertainty right now. As you know, there's the debate between whether we've got some extended cyclical effect or whether there's some secular things going on in the economy that are changing growth potential and changing optimal policy. I don't think the FOMC is going to be able to disentangle that before we have to make decisions. But I do think, under these circumstances, it's probably wise not to be counting so much on past correlations--things like the Phillips curve, which really haven't been operating very effectively for 10 years now--and instead to really look for some tangible evidence of, for example, pickups in wages or inflation that allow us to make informed decisions based on the evidence."

On forces holding down U.S. inflation:

"There is a case to be made for the proposition that one should look through things like the dollar and energy prices. I'd just point out, though--and that may well prove right, but I would point out that, as I said a moment ago, it's been some years now since inflation has approached the FOMC's target. There have been a series of factors which, for some period of time, have kept inflation down, and that's why my own perspective is that one should watch to see some tangible evidence that allows one to develop that reasonable confidence that inflation will return to target."

On whether the Fed should raise interest rates this year:

"Based on what I just said, and based also on what one might call a risk-management approach of being concerned that a premature rise might be harder to deal with than waiting a little bit longer, right now my expectation is--given where I think the economy would go--I wouldn't expect it would be appropriate to raise rates [this year]. But I want to hasten to add that that is an outlook that changes based on developments in the economy and our being forward-looking about it. I do think there's been too much focus on a particular meeting and a particular date and not enough on the overall conditions of the economy."

Write to Ben Leubsdorf at ben.leubsdorf@wsj.com

(END) Dow Jones Newswires

October 13, 2015 17:05 ET (21:05 GMT)