Kocherlakota Says FOMC Goes Too Far With 2014 Rate Pledge

Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said he believes the Federal Open Market Committee has gone too far by pledging to hold the main interest rate near zero at least through late 2014.

“I would not have chosen to put that date as far out as the committee has chosen,” Kocherlakota said in response to an audience question after a speech today in Williston, North Dakota.

The policy-setting FOMC repeated on Aug. 1 that it expects economic conditions to warrant unusually low interest rates, while saying it’s prepared if necessary to increase stimulus to reduce unemployment. Policy makers are next scheduled to meet Sept. 12-13.

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