Narayana Kocherlakota, Columnist

The Fed Needs More Than One Direction

Data dependence means being ready to move rates down as well as up.

June 15, 2016 at 6:04 PM UTC

Narayana Kocherlakota is a Bloomberg Opinion columnist. He is a professor of economics at the University of Rochester and was president of the Federal Reserve Bank of Minneapolis from 2009 to 2015.

Flexibility matters.
Photographer: Emmanuel Dunand/AFP/Getty Images

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Since the Federal Reserve raised its short-term interest-rate target in December 2015, much has changed for the worse: Job gains and overall output have disappointed, projections of future growth have declined, depressed inflation expectations have cast doubt on the Fed's credibility, and threats such as Britain's possible exit from the European Union have added to global uncertainty.

This all suggests that the central bank should be contemplating much more radical actions than it did at today's policy-making meeting, where officials decided to leave interest rates unchanged.