Narayana Kocherlakota, Columnist

The Fed Is About to Make a Mistake

The central bank should lower rates, but that won't happen at next week's policy-making meeting.

September 16, 2016 at 11:00 AM 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.

Your move.
Photographer: Andrew Harrer/Bloomberg

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Next week, officials at the U.S. Federal Reserve will hold a crucial meeting on whether to raise interest rates. Whatever they do, it will probably be a mistake.

More than seven years after the recovery began in mid-2009, inflation remains below the central bank's 2-percent target, indicating that the economy is still operating below potential. As of July, consumer prices were up just 0.8 percent from a year earlier. Excluding volatile food and energy goods and services, they were up 1.6 percent.