Fed’s Kocherlakota wants more stimulus

The U.S. Federal Reserve should look to its own economic forecasts and decide to give the economy more policy support, a top Fed official said on Wednesday.

Speaking two weeks ahead of the U.S. central bank’s policy meeting when it is mostly expected to reduce its accommodation, Minneapolis Federal Reserve Bank President Narayana Kocherlakota repeated his long-held stance that, instead, the Fed “should be providing more stimulus to the economy, not less.”

The Fed has been buying $85 billion in U.S. Treasuries and mortgage-backed securities monthly since last September in an effort to reduce long-term borrowing costs, and has promised to continue the program until there is substantial improvement in the U.S. labor market outlook.

It has also said it will keep interest rates near zero until the unemployment rate falls at least to a threshold of 6.5 percent, from 7.4 percent in July, as long as inflation remains near a 2-percent target.


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu