Fed’s Kocherlakota Says Price-Level Targeting Merits Debate
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Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said officials should consider temporarily aiming for inflation higher than the Fed’s 2 percent goal to make up for several years of below-target price gains.
The Federal Open Market Committee “could target a slightly higher inflation rate for a few years after 2018 in order to make up for the shortfall in the price level,” Kocherlakota said today in prepared remarks to the Economic Club of Minnesota in Minneapolis. He is a voting member of the FOMC this year.