Kocherlakota: May need to let inflation rise to boost jobs

Jun 01, 2013, 5:33 PM EDT
Minneapolis Federal Reserve Bank President Narayana Kocherlakota speaks at a macro-finance conference hosted by the Boston Federal Reserve Bank and Boston University in Boston, Massachusetts November 30, 2012.
REUTERS/Brian Snyder

The U.S. Federal Reserve may need to let inflation run a little higher than its 2% target in order to bring down unemployment faster, Minneapolis Federal Reserve Bank President Narayana Kocherlakota said. Strictly capping inflation at 2 percent while allowing high unemployment to linger would be an "inappropriate" approach to monetary policy, suggested in slides prepared for a presentation at the Istanbul Center for Economic Research. However, he offered little insight into whether and when the U.S. central bank would ease up on its quantitative easing by reducing its $85 billion-a-month bond-buying program,.

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