Fed's Kocherlakota 'More Upbeat' on US Economy
Special to CNBC.com
Minneapolis Federal Reserve President Naryana Kocherlakota told CNBC he is "slightly more upbeat" about the U.S. economy going into 2012, seeing GDP growth between 2.5 percent and 3 percent next year.
"You don't want to get hung up on one month or two months worth of data but I do think that I'm a little more optimistic than I was, say, a month ago or two months ago," he said Tuesday. He said that based on the data he is "even more convinced" than previously the U.S. isn't headed toward recession .
He said short-term unemployment — those out of work for six months or less — has improved from the 10 percent level of when he took office in 2009 to the current 8.6 percent.
"That's progress," he said. "It might not be as fast as we'd like to see but that's progress." Longer-term unemployment, he acknowledged, is another, worsening story.
He would like to see an unemployment rate between 8 percent and 8.5 percent in 2012 and 7.5 percent to 8 percent in 2013, "hopefully closer" to the lower end in both cases.
Kocherlakota was one of three Fed presidents during the Fed's Aug. 9 meeting who opposed any effort to aggressively stimulate the U.S. economy, seeing such a move as a spark to ignite inflation . In the end the Fed decided to leave interest rates near zero through mid-2013.
The Minneapolis Fed chief said Tuesday the current economic data do not support another round of quantitative easing , or "accommodation," in Fedspeak.
"You've gotta be concerned about inflation as a central banker," he said. "I think the reason I dissented in August is more that I didn't see providing more accommodation as being consistent with the evolution of the data," which show inflation has gone up since the end of 2010. The Fed has a mandate of keeping inflation at around 2 percent, he said.
Rather than viewing himself as an "inflation hawk," he considers himself a "consistency hawk."
'We have to be consistent with the evolution of the data so people believe we are going after the things we say we are going after," he said.