March 20, 2012 / 11:18 PM / 5 years ago

Fed may need to hike as soon as 2012 -Kocherlakota

ST LOUIS, March 20 (Reuters) - With inflation on an upswing and the labor market doing better than expected, the U.S. Federal Reserve should not ease policy any further and may need to start raising interest rates as soon as this year, a top Fed official said on Tuesday.

“I don’t feel the need for additional accommodation right now,” Narayana Kocherlakota, president of the Minneapolis Federal Reserve Bank, told reporters after a speech at Washington University in St. Louis.

Asked when the Fed could be expected to exit from its current zero-interest-rate policy, Kocherlakota said he would not advocate for hiking rates immediately.

Still, if the unemployment rate continues to fall and inflation rises, in line with his expectations, above 2 percent, “I would see an argument for initiating that exit in 2012 or 2013,” he said.

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