St. Louis Federal Reserve Bank President William Poole (search) said on Wednesday the central bank's expectation that it can raise interest rates at a "measured" pace was not an ironclad commitment.

"Policy will be data-driven when we get data surprises that require a different policy setting," Poole told reporters after delivering a speech to a regional business group. "'Measured pace' should not be viewed as an ironclad commitment to a particular outcome at the next meeting."

Poole, who is not a voter on the Fed's policy-setting Federal Open Market Committee (search) this year, said it was "not illogical" to view the Fed's expectation that rates could rise at a "measured" pace as meaning small, quarter-percentage point rate hikes, since that has been the Fed's course since the language was introduced.

Federal Reserve (search) officials raised the benchmark federal funds rate to 3 percent last week with an eighth consecutive quarter-point hike and repeated their belief borrowing costs could rise at a "measured" pace without inflation erupting.

In his speech, which was posted inadvertently to the St. Louis Fed's Web site on Tuesday, Poole said he was optimistic on the inflation outlook, although he thought inflation risks were tilted a bit to the upside.

Elaborating on his views in remarks to reporters, the St. Louis Fed chief said he would watch the interplay among wages, productivity growth and profit margins closely for clues to how the outlook might shift.

"If we start to see an issue, I guess, arising on any of those fronts, then it would say ... were likely to see increased inflationary pressure and that means that we're going to have to look carefully at the possibility of a tighter policy," he said.

So far, he said, both those signs and slow money supply growth suggested little need for a great amount of worry.

"I think you can tell that I'm not relaxed about inflation ... but I don't think there's reason for ... concern, deep concern or worry," Poole said.

He said companies were still finding good opportunities to expand their productivity, which would tend to damp inflation pressures.

"I think there is still a lot in the works," Poole said, noting a good proportion of business investment was aimed at boosting productivity as opposed to simply expanding output.

He also said anecdotal reports suggested workers were still "in pretty plentiful supply," and that the data supported this view.

"It looks like there's a fair amount of room for expansion of employment without creating a lot of upward pressure on wages," Poole said.

Fed officials are hopeful they can move interest rates up to a more "neutral" level — one that neither spurs nor hinders economic activity — before inflation erupts.

Poole said that while economists generally believed the neutral inflation-adjusted federal funds rate lay between 1 percent and 3 percent, the level actually needed to keep the economy in balance sometimes would be outside that range.

"It gives your sort of a starting point, a reference point ... (but) that doesn't say that when we got to one side or the other that it was obvious which way things were going to go," he said.

On a separate topic, the regional Fed bank president said that while housing prices were rising rapidly in some areas, most of the movement was in a "narrow segment" of the market — suggesting he saw little risk of a national bubble.

He said home price gains appeared to be mostly explained by the low level of interest rates and rising incomes.

Poole also said a "soft patch" evident in recent economic data "may, I don't know that it will, but may" get revised away, in part because seasonal adjustment revisions tend to smooth "random fluctuations."