Should prices remain stable, the fed funds rate target should be kept "extraordinarily low" until the jobless rate drops under 5.5%, Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said Thursday.

The Federal Open Market Committee can add stimulus to the economy by including in its statement "a description of the economic conditions that would lead the Committee to contemplate the initial increase in the fed funds rate above its currently extraordinarily low level," he said, according to prepared text of a speech in Ironwood, Mich.,released by the Fed.

Calling it "a liftoff plan," Kocherlakota said "important inflation safeguards" would be "embedded in the plan," including holding off if the FOMC's medium-term inflation outlook is above 2.25%, something he said "is unlikely to occur," based on history.

The idea, he noted, is based on a plan by Federal Reserve Bank of Chicago President Charles Evans.

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