Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said he believes U.S. stocks are now in correction mode and doubts the markets were recently in a bubble, Dow Jones reported on Wednesday.
He went on to say that the Fed's $10 billion step-downs in asset purchases are the "default mode'' although policymakers could adjust the pace if necessary.
He added that he's not surprised by the market selloff.
Lockhart told reporters a serious material change in the economic outlook, especially for the worse, could make policymakers re-evaluate but he saw a "high probability'' of continuity.
The Fed has trimmed back its monthly bond purchases by $10 billion at each of its last two meetings. It also said last week it would extend tests of its overnight reverse repo facility until January 2015.
Lockhart said the Fed could potentially use the repos as a tool to influence short-term rates in future, but they were still an experiment at this stage.
—By Reuters with CNBC