Fed's Kocherlakota says rate policy not too easy (by Greg Robb)
WASHINGTON (MarketWatch) -- The Federal Reserve hasn't overdone easing moves to help the economy, Narayana Kocherlakota, the president of the Minneapolis Federal Reserve Bank, said on Tuesday. In a speech at the University of Minnesota in Duluth, Kocherlakota said he strongly disagrees with the argument that the Fed has erred in being too loose. Given the central bank's current forecast of high unemployment and low inflation in coming years, "monetary policy is, if anything, too tight, not too easy," he said. The Fed has kept interest rates close to zero for almost four years and bought more than $2.3 trillion of assets. Kocherlakota conceded that the current policy is unprecedented, but he said it must be judged as the proper response to the financial crisis, which was the biggest shock to hit the economy in 80 years. "A historically unprecedented shock should lead to a historically unprecedented monetary policy response," he said.