Federal Reserve Bank of Dallas President Richard Fisher arrives to speak about the concept of breaking up 'too big to fail' banks to a breakout group at the Conservative Political Action Conference (CPAC) in National Harbor, Maryland, March 16, 2013. REUTERS/Jonathan Ernst LONDON (Reuters) - Federal Reserve policymaker Richard Fisher said on Monday he was comfortable with the rise in U.S. Treasury yields following the central bank's signal it planned to slow its support, but cautioned that a big spike would be "destructive".

"I'm not uncomfortable with the current rates," Fisher told journalists after speaking at an event organized by OMFIF. "I don't think you can judge it based on a couple of days... we've had this market reaction but we have to wait and see how things settle out."

Last week Fed Chairman Ben Bernanke signaled the central bank may start winding down its bond-buying program later this year and end it by the middle of 2014, when unemployment will likely be about 7 percent.

His comments sent stocks tumbling and bond yields sharply up, as investors prepared for less stimulus from the Fed despite a less-than-stellar pace of economic recovery.

"What personally I would be worried about is a significant spike (in U.S. yields)," Fisher added. "That would show risk of financial instability but a gradual rise over time (would not worry me)."

Fisher, who heads the Dallas Federal Reserve, also said the central bank had to follow through with its signal if things panned out roughly as expected with the U.S. economy.

"If the big operators detect weakness they will test it. If they pick up a scent of lack of resolve they will test it."

"Collectively we will be tested. We need to expect a market reaction," Fisher added.

(Reporting by Marc Jones and Francesco Canepa)