Fed ‘needs to do more’ to stimulate economy - FT.com
"Mr Kocherlakota said the Fed should improve its communication about how it will behave once the unemployment rate falls below its existing threshold of 6.5 per cent. He said the pledge made in December of low rates “well past” that point is not sufficient. “The problem with what’s in the statement right now is its going to become increasingly less useful once we fall below 6.5 per cent,” said Mr Kocherlakota. Rather than lower the 6.5 per cent threshold, he said the Fed could bring in new guidance about how it will behave until unemployment hits 5.5 per cent, perhaps with a tighter get out clause on inflation."
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.