Kocherlakota Says Fed Should Do More on Unemployment

Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said the central bank should do more to boost hiring by aiming to meet a lower jobless-rate threshold before policy makers raise their main interest rate.

The Fed can “provide more needed stimulus” by reducing the unemployment-rate threshold to 5.5 percent from 6.5 percent, Kocherlakota said in a speech today in Golden Valley, Minnesota. Growth will remain “moderate” and inflation will be below the Fed’s 2 percent target for the next two years under current policy, he said, while estimating unemployment will be above 7 percent.