Federal Reserve Bank of Minneapolis President Narayana Kocherlakota, who has argued the central bank should hold interest rates near zero until next year, will join the University of Rochester on January 1, 2016.
Kocherlakota took over as Minneapolis Fed chief in October 2009. In December 2014 he announced that he would not seek reappointment when his term ended on February 29, 2016, in an unusual premature departure for a reserve bank president.
“I am truly honored to have been selected to serve as the first Lionel McKenzie Professor at the University of Rochester,” Kocherlakota said in a statement released by the Minneapolis Fed. “The university has a long, rich academic history with eight Nobel prize winners among its faculty and alumni, and I am excited to become a member of such a distinguished institution.”
Answering questions from reporters after a speech on May 28 in Helena, Montana, Kocherlakota called his time at the Minneapolis Fed “a tremendous opportunity to serve the public and learn and engage with the public,” but said “it just felt like the right time to move on to new opportunities.”
Kocherlakota, who previously served the Minneapolis Fed as a consultant, joined as president from his post as an economics professor at the University of Minnesota.
He has emerged in recent years as one of the most dovish members of the U.S. central bank’s policy-setting Federal Open Market Committee. He has argued in recent speeches that it should not begin raising interest rates this year, contrary to most of his colleagues, because inflation is still too low.
Lack of Persuasiveness
“Obviously, I regret my lack of persuasiveness,” he told reporters after the May 28 speech. “I think we would have better policy if I were more persuasive than I’ve been able to be.”
Minneapolis Fed board directors MayKao Hang and Randall Hogan will lead the search committee to replace Kocherlakota, assisted by search firm Spencer Stuart, the Minneapolis Fed said in a statement released later on Monday.
“We will seek a broad, diverse group of candidates from within and outside the Federal Reserve System,” said Hogan. “We plan to seek individuals who have the requisite experience to be both a strong policy maker and strong leader.”