ROCHESTER, Minn., April 8 The Federal Reserve
needs to formulate, and then communicate, a sharper collective
vision on what conditions would lead it to raise interest rates
from rock-bottom levels, a top Fed official said on Tuesday.
Without such a vision, "We face this instability, that two
words in a press conference ... can end up moving financial
markets," Narayana Kocherlakota, president of the Minneapolis
Federal Reserve Bank, told reporters after a speech here.
The Fed last month said it would reduce its monthly bond
purchases to $55 billion and would continue to trim the program
in measured steps as long as the economy improves as it expects.
After the policy-setting meeting, Fed Chair Janet Yellen
briefly roiled markets when she suggested the Fed may start
raising rates around "six months" after the bond-buying program
(Reporting by Ann Saphir; Editing by Leslie Adler)