The Federal Reserve should keep interest rates near zero this year, Minneapolis Fed President Narayana Kocherlakota reiterated on Tuesday, or risk slowing U.S. job growth and inflation’s return to the U.S. central bank’s 2-percent goal.
“The job market is – finally – on a highly desirable upward trajectory,” Kocherlakota said in remarks prepared for delivery to the Minnesota Bankers Association. “We are more likely to continue on that welcome trajectory if the (Fed) does not tighten monetary policy in 2015.”
Kocherlakota’s views mark him as one of the Fed’s most dovish policymakers. Most Fed officials believe that given the unemployment rate’s fall to a near-normal 5.6 percent, a rate hike this year will be appropriate.