Minneapolis Fed President Narayana Kocherlakota issued a statement Friday explaining his dissent at Wednesday's meeting of the Federal Open Market Committee, saying the decision to continue gradually removing accommodation creates an "unacceptable downside risk" to inflation and inflation expectations. "In my assessment, the FOMC's failure to respond to weak inflation runs the risk of creating a harmful downward slide in inflation and longer-term inflation expectations of the kind that we have seen in Japan and Europe. I see this risk to the credibility of the inflation target as unacceptable, given how hard it would be for the FOMC to respond successfully if this eventuality did indeed materialize," he said. Because of Kocherlakota's plans to step down, that was the last time the regional president will vote.
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