PHILADELPHIA (Reuters) – The Federal Reserve is actively preparing for the possibility that the United States could default as a deadline for raising the government’s $14.3 trillion borrowing limit looms, a top Fed policymaker said on Wednesday.

Philadelphia Federal Reserve Bank President Charles Plosser said the Fed has for the past few months been working closely with Treasury, ironing out what to do if the world’s biggest economy runs out of cash on August 2.

PHILADELPHIA (Reuters) – The Federal Reserve may need to tighten monetary policy later this year if temporary factors holding back economic growth abate as expected, a top Fed official said on Wednesday.

Philadelphia Federal Reserve Bank President Charles Plosser told Reuters he expects the economy to grow at a 3-3.5 percent annual rate over the second half of 2011 with the jobless rate declining to around 8.5 percent by year’s end.

PHILADELPHIA, July 20 (Reuters) – The U.S. Federal Reserve
is actively preparing for the possibility that the United
States could default as a deadline for raising the government’s
$14.3 trillion borrowing limit looms, a top Fed policymaker
said on Wednesday.

Philadelphia Federal Reserve Bank President Charles Plosser
said the Fed has for the past few months been working closely
with Treasury, ironing out what to do if the world’s biggest
economy runs out of cash on August 2.