Fed's Kocherlakota says would be "mistake" to raise rates too soon

BRAINERD, Minn. Fri Aug 15, 2014 12:09pm EDT

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BRAINERD, Minn. Aug 15 (Reuters) - The Federal Reserve should not make the mistake of raising interest rates too soon, a top Fed official said on Friday, because doing so could risk knocking the wind out of the U.S. economic recovery.

Pointing to the "disturbing situation" in Europe, where inflation is below 1 percent, Minneapolis Fed President Narayana Kocherlakota warned against heeding growing calls for the U.S. central bank to exit from its super-easy monetary policy soon.

It is a "mistake to go too early" on raising rates, he told a group of community bankers. As long as U.S. inflation looks likely to stay below 2 percent, the Fed has room to help boost employment through monetary policy, he said. (Reporting by David Bailey; writing by Ann Saphir; Editing by Chizu Nomiyama)

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