Fed's Kocherlakota sees drop in jobless rate

(Reuters) - The U.S. economy will pick up speed this year, pushing unemployment down to 7.7 percent by the end of this year and to 7 percent by next year, a top Federal Reserve official said on Tuesday.

Minneapolis Fed President Narayana Kocherlakota also predicted inflation will rise to 2.3 percent, above the Fed's target of 2 percent, next year, "as monetary policy remains highly accommodative." The economy will likely grow between 2.5 percent and 3 percent, he said.

The forecasts, published on the Minneapolis Fed's website, show Kocherlakota is among the most optimistic of his fellow policymakers on the labor market, and his view on inflation suggests he could push for more monetary policy tightening sooner than some others.

Kocherlakota is known as a policy hawk, and does not have a vote this year on the Fed's policy-setting panel.

Most Fed policymakers see unemployment staying above 8 percent this year, and inflation no higher than 2 percent in the next several years, according to projections released last month.

(Reporting by Ann Saphir; Editing by Chizu Nomiyama)