Federal Reserve Bank of Minneapolis President Narayana Kocherlakota reiterated his belief that based on his outlook the fed funds rate should be steady in 2015.
"Given the lags associated with monetary policy, such a move would lower anticipated inflation over the following one to two years-that is, serve to push inflation down and further away from the FOMC's goal of 2 percent. So, under my current outlook, it will be inappropriate for the FOMC to raise interest rates during 2015," he told a group at Stanford University, according to prepared text released by the Fed.
"I've made no reference to the falling unemployment rate," he said. "I don't see a falling unemployment rate as a reason to tighten policy unless that fall is generating unduly high inflationary pressures. The essence of my inflation outlook is that, despite recent and anticipated falls in the unemployment rate, I don't see such pressures at this time."
Also, he reminded that his outlook is data dependent. "My inflation outlook could rise. If so, my preferred date of interest rate 'lift-off' would come forward in time-possibly into next year."
