Federal Reserve Bank of Minneapolis President Narayana Kocherlakota praised the “decentralized nature” of Fed policy making, saying his bank’s board of directors helps him gain a complete grasp of the economy.
“The Federal Reserve is very good at aggregating and analyzing data, but data often lag and do not give a complete description of what is currently happening in the economy,” Kocherlakota said today in the text of prepared remarks in Williston, North Dakota. “The information that I receive from our directors is important in helping me complete that economic picture.”
The composition of the board of directors at the regional Fed banks “ensures that the public is represented by directors who are chosen locally, and not by Washington,” Kocherlakota said. “In this way, the framers of the Federal Reserve Act carefully balanced national and local interests.”
The Minneapolis Fed chief, who doesn’t vote on the policy- setting Federal Open Market Committee this year, gave similar remarks in Minot, North Dakota yesterday. He said he sees no conflict of interest arising from the fact that bankers serve on the boards of the regional Fed banks.
Kocherlakota didn’t comment on the economy or the outlook for monetary policy in his prepared remarks today.
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