Fed's Kocherlakota Lowers Opposition to More Easing

08-30-2011 • CNBC.com

A top Federal Reserve official who dissented from the U.S. central bank's move this month to ease monetary policy further signaled he would drop his opposition. But Minneapolis Fed President Narayana Kocherlakota stopped well short of saying he would support any further easing, and his remarks show he remains firmly on the hawkish wing of the Fed's policy-setting panel. The Fed , which has already cut short-term interest rates to near zero and bought $2.3 trillion in long-term securities to boost the recovery, said on Aug. 9 it would likely keep benchmark U.S. rates exceptionally low for the next two years. The decision drew three dissents, the most in nearly 20 years. "I see no reason to revisit the decisions of August 2011," Kocherlakota said in remarks prepared for delivery to the National Association of State Treasurers in Bismarck, North Dakota. "I believe that undoing this commitment in the near term would undercut the ability of the Committee to offer similar conditional commitments in the future, and this ability has certainly proved very useful in the past three years," Kocherlakota said. "So, I plan to abide by the August 2011 commitment in thinking about my own future decisions."