Fed rate hike in 2015 is 'inappropriate,' Kocherlakota says
WINONA, Minn.(Reuters) - Raising interest rates this year, as most Federal Reserve officials expect, would be "inappropriate" because it would delay the return of too-low inflation to the U.S. central bank's 2 percent goal, a top Fed official said on Tuesday.
A rate hike would also work against the Fed's other goal of full employment, Narayana Kocherlakota, president of the Minneapolis Fed, said in remarks prepared for delivery before a Town Hall at Winona State University.
"The Fed can best achieve its objectives by keeping the fed funds rate target at its current level during this calendar year," Kocherlakota said.
Kocherlakota's view seems increasingly out of the mainstream among Fed policymakers, nearly all of whom are open to rate hikes this year. Several are pushing for an increase as soon as June. The stronger labour market, these policymakers say, means the Fed ought to start tightening policy soon to prevent the economy from overheating.
Kocherlakota's appearance Tuesday is his third in a week during which he has argued strongly against tightening monetary policy. He is scheduled to take questions for about an hour.
(Reporting by David Bailey; Writing by Ann Saphir; Editing by Leslie Adler)
