When Federal Reserve policymakers meet next month to decide whether to take action to boost the economy, it will be a 'close call,' a top Fed official said on Thursday on the eve of a speech by chairman Ben Bernanke that has global markets on tenterhooks.

Atlanta Fed president Dennis Lockhart, a centrist voter on U.S. monetary policy, said further stimulus would have some positive effect on the U.S. economic recovery, but cautioned that the costs of such action are not altogether clear.

"If we were to see deterioration from this point - let's say persistence of job growth numbers that were well below 100,000 a month ... or if we were to see signs of disinflation that could signal the onset of deflation - then there wouldn't be much of a question about policy," Lockhart told CNBC.

"But now I think the policy question is, how much will you gain and of course what are the costs in the short and longer term," he said as an annual central bankers symposium kicked off in Jackson Hole, Wyoming.

Financial markets are abuzz with speculation that Bernanke could hint at a third round of asset purchases known as quantitative easing, or QE3, when he takes the podium on Friday - and that Fed policymakers could adopt the plan at their September 12-13 meeting.

The Fed in late 2008 slashed interest rates to near zero and has bought $2.3 trillion in assets in an unprecedented drive to revive the economy after the worst recession in decades.

Yet the recovery, especially in jobs, has been slow and economic growth stumbled this year, stoking expectations the Fed will act again.

But with economic data in recent weeks relatively better, and some central bankers worried that QE3 would have little benefit, nothing is certain.

One of the Fed's most prominent policy hawks, Charles Plosser of the Philadelphia Federal Reserve, warned that there is no point in launching another asset-buying program, in part because it risks future inflation.

"My current assessment both of the economy and the effectiveness of QE is that I don't think it really beats the cost-benefit test right now," Plosser said on CNBC.

Although Plosser said it is possible that QE3 could bring down interest rates somewhat, he warned that the massive cash reserves now on bank balance sheets could eventually drive up prices and hurt the economy.

"When those excess reserves ... begin to flow out into the economy, that's when the risk of inflation will become even more heightened than it is now," he said. "Right now it's just a risk."

DIALING BACK QE3 EXPECTATIONS

U.S. stocks fell and Treasury bonds rose on Thursday as traders slightly dialed back predictions that Bernanke will hint at QE3.

The dollar, which has been pressured by the two huge easing programs in recent years, gained against the euro.

It is "likely that the vast bulk of (Bernanke's) speech will be devoted to examining past Fed actions, and any discussion of future actions will simply repeat recent official Fed communications," said JPMorgan economist Michael Feroli.

The U.S. jobless rate edged up to 8.3 percent last month, and recent data on business spending and inflation seemed to open the door to more policy action.

But QE3 expectations have been tempered by a rebound in retail sales and jobs growth in July, a month in which nonfarm payrolls rose by 163,000.

The Labor Department will announce August jobs numbers next Friday.

Only 44 per cent of fund managers now think the Fed will announce a third round of quantitative easing, down from 70 per cent in July, according to a Reuters global asset allocation poll published on Thursday.

"Further stimulus, if we were to put that in place, would have some positive effect," Lockhart said, adding that he is not 'overly concerned' about the longer-term costs of more action.

The policymaker argued it was possible for the Fed to push longer-term interest rates even lower than they already are, signaling that could be done by moving into the future the date the Fed has targeted for keeping overnight rates near zero.

On August 1, the central bank repeated that it expected to keep rates near zero at least through late 2014.

Minutes from the meeting show that many Fed policymakers wanted to adjust the date at that time, but that the decision was put off to the September meeting.

TAKING STOCK, DRAWING LINES

Policymakers across the Fed's philosophical spectrum have drawn lines in the sand in recent days, with Chicago Fed president Charles Evans on one side calling for immediate QE3 and Richard Fisher of Dallas on the other saying nothing has been decided.

Sandra Pianalto of the Cleveland Fed - who like Lockhart is a centrist voter on Fed policy - said there are both benefits and limits to more easing.

Data on Thursday showed consumer spending rose the most in five months while the number of Americans filing new claims for jobless benefits held steady last week.

Lockhart said it was a good time to 'take stock' in the performance of the U.S. economy.

Gross domestic product growth has been around 2 per cent throughout the recovery, he said, calling it 'very modest' and not 'likely to make great progress in bringing down unemployment'.

Inflation has been 'well behaved' near 2 per cent, Lockhart noted.