Fed should communicate more effectively, Kocherlakota says
LA CROSSE, Wisc., Sept 5
LA CROSSE, Wisc., Sept 5 (Reuters) - The Federal Reserve should find ways to communicate its intentions better, both on its plans for paring its massive bond-buying program and for eventually raising interest rates, a top Fed official said on Thursday.
Bond yields jumped and stocks swooned after Fed Chairman Ben Bernanke in May suggested the Fed could start to trim its $85 billion-a-month bond-buying program later this year, a market reaction that took some Fed policymakers by surprise.
"I wouldn't say 'overreacted,' I would say we have to do a better job at communicating," Minneapolis Fed President Narayana Kocherlakota said at the University of Wisconsin campus.
The Fed, he said, should find ways to be clearer also about when and how fast it is likely to raise rates after unemployment falls to 6.5 percent, a threshold at which the Fed has only said it would consider raising rates.
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