Minneapolis Fed leader Narayana Kocherlakota repeated on Friday his call for the central bank to do whatever it can to get the unemployment rate to fall quickly.
The official’s speech largely repeated remarks he made in late September, in the wake of the Federal Reserve‘s shock policy meeting that saw officials press forward with their easy money policy against broad market expectations they’d cut back on the stimulus. Mr. Kocherlakota has been a steadfast support of aggressive action, and he repeated his call for the Fed to do even more than it currently is to bring down the unemployment rate quickly.
“There is considerable monetary policy capacity” still available to the Fed, even with the Fed’s short-term interest rate target pegged at zero percent, and the balance sheet swollen to historic levels, Mr. Kocherlakota said.
He said the Fed must do “whatever it takes in the next few years” to lower an unacceptably high unemployment rate. He noted that even though the jobless rate had fallen since the end of the recession, it remains high, and the amount of progress suggested by the jobless rate drop actually overstates the level of improvement.
Mr. Kocherlakota repeated that the Fed must be “willing to continue to use the unconventional monetary policy tools that it has employed in the past few years.” He added “doing whatever it takes will mean keeping a historically unusual amount of monetary stimulus in place–and possibly providing more stimulus.”
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