Conversations with the Fed, January 10, 2013
Minneapolis Fed President Narayana Kocherlakota spoke at a Conversations with the Fed event at the Minneapolis Fed on January 10, 2013. Chris Farrell moderated the discussion after Kocherlakota's short speech. Some of the event was captured on Twitter.
Remarks and discussion w/ Kocherlakota start at 7PM. Tweeting more than normal. Watch live at 7PM CST. ustre.am/S4aS #MFedQandA- Kocherlakota remarks prior to discussion with Chris Farrell and a public audience @MinneapolisFed. bit.ly/VOqqmI
- Kocherlakota: I see output as continuing to grow slowly—at around 2.5 percent in 2013 and around 3 percent in 2014. bit.ly/VOqqmI
- Kocherlakota: I expect unempl to continue to fall only slowly, down to around 7.5 percent in late 2013. bit.ly/VOqqmI
- Kocherlakota: I expect PCE inflation to be only 1.6 percent in 2013 and 1.9 percent in 2014. bit.ly/VOqqmI
- Question about if structural unemployment is contributing to the current unemployment rate. #MFedQandA
- Kocherlakota: The level of what’s structural unemployment seems relatively small. Wages and inflation another indicator… (1/2) #MFedQandA
- (2/2) Kocherlakota: …if it were all structural unemployment, you would see workers bidding up wages, and we are not seeing that. #MFedQandA
- Question: How much national debt can the U.S. accumulate before it becomes unsustainable? #MFedQandA
- Kocherlakota: When we think about financial stability we especially need to think about the future. #MFedQandA
- Kocherlakota references the Financial Stability Oversight Council in his talk about #TBTF institutions. 1.usa.gov/WGrqWm
- Question about bubbles. Kocherlakota: Not sure if that is the right question - the question is, how risky are prices right now? #MFedQandA
- Kocherlakota: I would be very cautious about using monetary policy as a tool in managing untoward moves in asset prices. #MFedQandA
- Question about the zero interest rate policy. What long-term pressure will this policy have on future inflation? #MFedQandA
- Kocherlakota: People say “Fed is creating a lot of money, there has to be inflation.” But past 5yrs PCE averaged just 1.7%. (1/2) #MFedQandA
- (2/2) Kocherlakota: But what about the future? Fed can now control inflationary pressures by paying interest on bank reserves. #MFedQandA
- Kocherlakota: No, but, regionally there are examples of very low unemployment. Consider the oil boom in ND currently. bit.ly/Kkwqej
- Thank you for joining us tonight @MinneapolisFed for the discussion with Kocherlakota and @cfarrellecon. #MFedQandA
