Dismissing the need for further monetary policy accommodation, Federal Reserve Bank of Minneapolis president Narayana Kocherlakota said in an interview on CNBC that he is "slightly more upbeat" about economic growth next year, adding that unless the forecast for inflation "softens considerably" while unemployment rises, there is no need for Fed action.
He sees "continued progression" in the battle against unemployment, but said it's "not as fast as we'd like to see."
The measures of slack, excluding long-term unemployment, are near 2004 levels, suggesting no further help is needed at this time, he said. Further easing to lower the long-term unemployment rate would come with unpleasant trade-offs that might be too costly.
"The question is, will the Fed raise rates sufficiently rapidly to keep inflation under control?" Kocherlakota said. "And the answer is, of course, yes."
"We have to be clear about what our objectives are in terms of employment and inflation and then we have to be clear about the strategy we're using to try to achieve these goals," he said.
Objecting to the term "inflation hawk," Kocherlakota termed himself a "consistency hawk" and "credibility hawk."
It's important that "people believe we're going after the things we say we're going after," he said.