Kocherlakota Says Fed Shouldn’t Hike Rates in June

In his six years as president of the Minneapolis Federal Reserve, Narayana Kocherlakota became famous for his most unusual transformation from a leading hawk to the biggest dove on the central bank’s policy committee.

Now, as an economics professor at the University of Rochester, Kocherlakota continues to think the central bank is being too hasty to tighten monetary policy.

In an interview with MarketWatch, Kocherlakota said more jobs would be created if the Fed delays tightening policy.

Kocherlakota said he doesn’t think that the labor market is at full employment, and doubts reports that businesses are having trouble finding workers. If there was a labor shortage, wage pressure and inflation would not be so tame, he said.

The Fed seems to be still on track for a June rate hike despite the weak job report and the soft inflation data. You think this is a mistake. Why?

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell