The Federal Open Market Committee's recent statement that tapering will depend on the economic outlook and the "costs and efficacy," could suggest to some The FOMC "is not following a goal-oriented approach to monetary policy," Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said Tuesday.

"Unfortunately, the recent public conversation about reducing the flow of asset purchases typically places little or no emphasis on these costs and efficacy considerations,"" Kocherlakota told the St. Paul Chamber of Commerce, according to prepared text released by the Fed. "As a result, the dialogue risks creating the perception that the Committee is not following a goal-oriented approach to monetary policy. Such a perception can create doubts and uncertainty about the criteria underlying Committee decisions. We can see the imprint of those doubts and uncertainty in the heightened level of bond market volatility over the past few months. I believe that the Committee could reduce this volatility by greatly enhancing its communication on the role of cost and efficacy considerations in its deliberations about the evolution of asset purchases."

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