Minneapolis Fed Bank Chief Criticizes Fed Monetary Policy

The head of the Minneapolis Federal Reserve Bank spoke in Rochester on Tuesday and his comments attracted some national media attention.

Narayana Kocherlakota appeared at a Rochester Area Chamber of Commerce event and offered some criticism of the Federal Reserve’s current monetary policies. He noted the Fed’ s main objectives are to promote price stability and promote maximum employment. Kocherlakota, who is a voting member of the Federal Reserve Open Market Committee, contends the central bank is keeping inflation too low. The Fed has set a target inflation rate of around 2% and Kocherlakota says it could take another four years to reach that level. He argues the current inflation rate, at around 1%, is curtailing demand for goods and services and that is hurting Americans seeking jobs. While the nation’s unemployment rate has slowly fallen since the Great Recession, Kocherlakota says the 6.7-percent jobless rate shows the job market is far from healthy.