According to Reuters:
The Federal Reserve’s policy of zero interest rates and asset purchases is appropriate, perhaps even insufficient, given forecasts for weak economic growth and low inflation for years to come, a top central bank official said on Thursday.
“Inflation will run below the Fed’s target of 2 percent over the next two years and the unemployment rate will remain elevated. This forecast suggests that, if anything, monetary policy is currently too tight, not too easy,” he told a meeting sponsored by Minneapolis Fed.
Kocherlakota predicts U.S. gross domestic product will expand at an annual pace of 2.5 percent in 2013 and 3 percent next year, estimates that put him on the low end of Fed policymakers’ forecasts.
“This growth will do little in terms of returning the economy to the historical trend,” Kocherlakota said in prepared remarks to a Minneapolis Fed event. “Consistent with this slow output growth, I expect unemployment to continue to fall only slowly.”
Over the last three years no monetary , or for that matter, any official has revised his position as drastically as Kocherlakota.
If only a few more could be so open minded…
Note: If you “renege” you get “slapped”. That´s what Steve Williamson did a few months ago, saying: The new Kocheralakota seems to be a flimsy-excuse guy.
HT: Patricia Stefani