Narayana Kocherlakota, president of the Federal Reserve Bank of Minneapolis speaking on his outlook for the US economy and monetary policy in 2015:
- Says again that he doesn’t favour raising rates in 2015
- Will take a few years before inflation back to 2%
- Federal Reserve underperformed on dual mandate for 3 years
- Lack of Federal Reserve response is further credibility risk
- Federal Reserve hasn’t acted on inflation expectations drop
- Federal Reserve eroding credibility by missing inflation goal
There isn’t much to surprise from Mr. K. here …. he is a well-known policy dove and is repeating what he has said many times previously
Note – Kocherlakota is not a voting member of the FOMC in 2015
Full text of his speech: Goal-Based Monetary Policy Report
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There will be more from Kocherlakota later – he is to take audience questions
