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Fed's Kocherlakota-Lower US jobless rate may not trigger rate hike

WASHINGTON, Oct 10 (Reuters) - The Federal Reserve couldkeep its benchmark interest rate low even if the U.S. joblessrate fell to 5.5 percent, Minneapolis Fed President NarayanaKocherlakota said on Wednesday.

Kocherlakota last month proposed a rule-based plan forkeeping interest rates super low until either the jobless ratehit 5.5 percent or the Fed's medium-term inflation outlook hit2.25 percent.

But on Wednesday he signaled he would support keeping thatplan flexible.

"When the unemployment rate reaches 5.5 percent, the Fedcould take into account a number of other economic conditions atthat point in time," he told community and business leaders inGreat Falls, Montana.

"So we could keep the fed funds rate low even though theunemployment rate has hit 5.5 percent," he said.

(Reporting by Jason Lange, editing by Gary Crosse)

((jason.lange@thomsonreuters.com; +1-202-310-5487, ReutersMessaging: jason.lange.thomsonreuters.com@reuters.net))

Keywords: USA FED/KOCHERLAKOTA FLEXIBLE