The Fed doesn't need to stimulate the economy now, as growth is continuing and deflation poses less of a risk, says Federal Reserve Bank of New York President Bill Dudley.

The central bank has injected $2.3 trillion into the nation's financial system to jolt the economy since the downturn, a policy officially known as quantitative easing.

Supporters of quantitative easing say the policy steers the country away from deflationary decline, while critics charge it plants the seeds for inflation down the road.

Editor's Note: The Final Turning Predicted for America. See Proof.

Dudley, known for his dovish views on inflation, tells CNBC he's a little wary of more easing.

“My view is that, if we continue to see improvement in the economy, in terms of using up the slack in available resources, then I think it's hard to argue that we absolutely must do something more in terms of the monetary policy front,” Dudley tells CNBC.

"What's changed for me…is that I'm a little bit more confident that the economy's going to keep growing," Dudley says.

"I'm a little bit less worried about a Japanese-style deflation outcome. And that was really the reason that, for me personally, motivated the need for further monetary policy action."

Headwinds still slow U.S. economic recovery and should they pick up, the Fed could stimulate the economy via quantitative easing, dubbed QE3 by the markets since a new round would be the third since the downturn.

A European meltdown could prompt Fed action as could poor fiscal planning.

At the end of the year, U.S. tax cuts are set to expire while automatic spending cuts are set to kick in, a combination dubbed by Wall Street as a fiscal cliff that could siphon hundreds of billions out of the economy next year.

“If downside risks from, say, Europe or the U.S. fiscal cliff were to really intensify, then I think you'd absolutely have to consider further monetary policy moves,” Dudley says.

Other Fed officials have made similar comments, pointing out that despite choppy progress, the U.S. economy is recovering and is in less need of a monetary crutch.

"I do not think this option can be taken off the table," says Atlanta Federal Reserve Bank President Dennis Lockhart, according to Reuters.

"QE3 will work under the right circumstances. But I don't believe such circumstances prevail at his time."

Editor's Note: The Final Turning Predicted for America. See Proof.