In an interview, the long-time critic of the Fed’s quantitative easing program said he was comfortable with the recent rise in market interest rates as investors increasingly predict he and fellow policy-makers will reduce the pace of accommodation sooner than later.

Yields on U.S. government bonds rose again on Friday after the Labor Department’s jobs market report showed employers in the United States stepped up hiring in May, adding 175,000 jobs.

“It shows that the fears of the sequester (spending cuts) and the layoffs, while they may be there, have not been as damaging yet to overall employment as some people had feared,” Plosser told Reuters.

“We would all like it to be stronger but there’s no reason for us to feel bad about the numbers that came out,” which he said showed the economy produced jobs at a “moderate rate.”

Plosser is in the minority of the Fed’s 19 policy-makers. The majority appear to still support buying $85 billion in Treasury and mortgage bonds per month to spur investment, hiring and overall economic growth.

Still, Fed Chairman Ben Bernanke and some others are increasingly, if tentatively, saying they could dial down the purchases in the months ahead if the economy continues to weather this year’s higher taxes and some $85 billion in government spending cuts, known as the sequester.

Anxiously predicting when the Fed will act, investors have boosted 10-year Treasury yields by 0.3 percentage point since the beginning of May, leading some to fret over an abrupt and exaggerated rise when the Fed finally decides to adjust its easing program (QE3).

Plosser, who regains a vote on the Fed’s policy committee next year, said he was comfortable where things stood in the market, given the drop in unemployment and pick-up in economic growth since QE3 was launched in September.

“I don’t think it’s a bad thing to have longer-term rates back up a bit,” he said in his office at the Fed headquarters here. “That will help us down the road. It doesn’t cause me a lot of angst.”

Frustrated with the slow and erratic recovery from recession, the central bank has said it will buy bonds until the labor market outlook improves substantially and will keep interest rates low until the unemployment rate falls to 6.5 percent or so.

U.S. unemployment stood at 7.6 percent in May, up from 7.5 percent in April.

(Reporting by Jonathan Spicer; Editing by Chizu Nomiyama)