High unemployment and inflation below the Fed’s 2 percent target “would argue for additional accommodation now,” Williams said today in an interview on Bloomberg Television from Jackson Hole, Wyoming. “I would like to see something that has a measurable effect on job growth. That would be arguing for a pretty large program” that’s “at least as large as QE2,” or the second round of quantitative easing, he said.

Fed Chairman Ben S. Bernanke made the case for more bond purchases today as policy makers weigh the need for further stimulus before their Sept. 12-13 meeting. They said additional stimulus will be needed “fairly soon” unless the outlook brightened, according minutes of their July 31-Aug. 1 meeting.

Williams, who votes on the policy-setting Federal Open Market Committee, joined Fed presidents Charles Evans of Chicago and Boston’s Eric Rosengren in calling for a program that doesn’t announce a fixed target level of securities the Fed will buy, unlike previous quantitative easing programs.

“It makes more sense to have a more open-ended approach” in which the central bank would conduct “a flow of purchases” of both mortgage-backed securities and longer-term Treasuries, Williams said in an interview with Michael McKee on “Street Smart.”

Spur Growth

Speaking today at the Kansas City Fed’s annual meeting of global central bankers and economists, Bernanke defended the U.S. central bank’s unprecedented measures to spur growth and repeated his readiness to do more as needed.

“The costs of nontraditional policies, when considered carefully, appear manageable, implying that we should not rule out the further use of such policies if economic conditions warrant,” Bernanke said.

U.S. stocks rose today as speculation grew that Bernanke and his colleagues were nearing a decision to ease policy further. The Standard & Poor’s 500 Index rose 0.5 percent to 1,406.58 at the close of trading in New York.

Deleveraging households, a weakening global economy and cutbacks in government spending all make for headwinds that will keep growth “relatively modest to moderate,” Williams said today.

Still, Glenn Hubbard, adviser to Republican presidential nominee Mitt Romney, said bond purchases by the Fed would do little to shore up the economy.

“I don’t think that another round of quantitative easing is going to have a material effect on the recovery,” Hubbard said today in an interview on Bloomberg Television. “Lowering the 10-year yield by another handful of basis points isn’t going to move the needle.”