FED update : Philly Fed's Plosser

Philly Fed's Plosser, in speech w/a hawkish tilt, issues a familiar infl concern: 'not yet clear' whether it 'will continue to recede in the coming year.'

'Additional monetary policy' tightening 'may be needed.' Pleasantly surprised by US 2006 econ performance.

But PCE infl 'came in higher than I would have liked.'

Not convinced infl on downward trend. Warns 2007 could have some surprises in store; he expects 3% real GDP, keeping unemp under 5%. Sees signs of improvement in housing mkt, but also uncertainty. Cont. strong cons. spending and progress on trade deficit also likely.

Notes dlr decline has cheapened U.S. exports.

No evidence of housing weakness spillover to econ. Other factors besides home prices affecting household wealth.