ST. LOUIS — Federal Reserve Bank of Minneapolis president Narayana Kocherlakota Tuesday night said the Fed should not ease monetary policy further, and in fact may need to tighten policy well ahead of the date conditionally projected by the Fed’s policymaking Federal Open Market Committee last week.
He said the FOMC may need to raise short-term interest rates as early as next year, if not later this year.
Kocherlakota predicated his call for tightening on a forecast of unemployment in “the high sevens” by the end of 2012 and “the low sevens” by the end of 2013, accompanied by inflation at or above 2%.
