CHICAGO (Reuters) - Minneapolis Federal Reserve President Narayana Kocherlakota on Friday repeated his call for the U.S. central bank to commit to keeping short-term interest rates low until the unemployment rate "normalizes."
The Fed has said it will keep rates near zero until unemployment falls to at least 6.5 percent, as long as inflation stays contained. But the bank's failure to clarify where rates will go after the jobless rate falls is one "hole" in its communications, Kocherlakota said.
He wants the Fed to promise to keep rates low until the national unemployment rate falls to at least 5.5 percent from its current 7.5 percent.
Another hole, he said, is the Fed's "vagueness" on how long it will keep buying assets to boost growth and hiring. The Fed has said it will continue to buy assets until the labor market outlook has improved substantially, but has not provided any specific milestones that would signal that goal has been reached.
"Our communications remain a work in progress," said Kocherlakota, who was speaking at a University of Chicago Booth School of Business conference with Swedish Riksbank Governor Stefan Ingves.
(Reporting by Ann Saphir)